
The International Monetary Fund (IMF) yesterday said although it doesn't doubt Nigeria's ability to repay its soaring debts, it was concerned about the country's rising ratio of debt-to-Gross Domestic Product (GDP).
Speaking on Arise News Channel, THISDAY's broadcast arm, last night, Resident Representative of the global organisation in Nigeria, Ari Aisen, stated that though current projection of debt-to-GDP ratio was 36 per cent, it could actually rise to 43 per cent.
Describing the figure as "very large", he explained that as an institution, the IMF would continue to highlight the need to properly manage the debt dynamics even as interest rates begin to climb worldwide.
Aisen explained that if there was a change in the current dynamics, Nigeria could be caught up in a very difficult position.
The IMF representative stated that the multilateral institution would support the federal government's plans to raise tax-to-GDP revenue in the coming years.
"The capacity to repay as I was saying is not really an issue. The record is very strong, both in terms of private obligations. And we actually saw at the end of last year, that the Eurobond issuance was oversubscribed, it was a success.
"So I want to allay those concerns and put it to rest. But I think it's important to recognise that because the fiscal deficits have been high and they need to be financed, and the trend of the debt to GDP ratio is increasing.
"We are projecting 36 per cent and it may go up to 43 per cent. Still not an alarming level, but very still large, already large.
"So , it's our job as an institution to highlight that eventually, that may become too large to bear. And be reminded also that debt dynamics are very important. Nigeria has been enjoying low interest rates and worldwide and around the world, because of inflationary concerns, interest rates are starting to climb," he explained.
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