The International Monetary Fund, IMF, has said the Federal Government could spend as much as 92.6 per cent of its revenue on debt servicing this year. This is contained in its 2021 Article 4, which was released yesterday.
It also estimated last year’s debt servicing-to-revenue ratio at 85.5 per cent.
As at the end of September, 2021, debt-servicing-to-revenue ratio stood at 76 per cent, implying that 76 kobo out of every N1 earned by the government was spent on payment of interest on debts.
IMF’s latest statement estimates the debt-servicing-to-consolidated revenue for 2021 and 2022 at 29 and 32.8 per cent respectively.
It also projects the public debt to grow by 117.8 per cent on a year-on-year basis in 2022, just as inflation is to grow at an average rate of 14.3 per cent.
The report pointed out that insecurity and poor COVID-19 vaccination were major factors challenging the country’s economic growth, stressing that worsening violence and insecurity could also derail recovery.
