The World Bank has said Nigeria’s biggest fiscal challenge is inadequate government revenue rather than its level of public debt, urging authorities to focus on improving revenue generation.
Speaking during an interview on Channels Television, the World Bank’s country director for Nigeria, Mathew Verghis, said Nigeria’s debt burden remains moderate when compared with many countries of similar size and should not be viewed as the country’s most pressing economic problem.
According to him, the real concern is that government revenue is too low to comfortably service debt and finance essential public services and infrastructure.
Verghis noted that Nigeria’s debt-to-economy ratio is lower than that of many neighbouring countries and distinguished the country’s situation from nations such as Ghana, which is undergoing debt restructuring.
He explained that borrowing is a common practice used by governments to fund long-term development projects that cannot be financed entirely with annual revenues. Such investments, he said, can boost economic growth and improve a country’s capacity to repay its loans over time.
Using electricity access as an example, Verghis said expanding power supply to millions of Nigerians requires substantial upfront funding, but the resulting economic growth would strengthen the country’s ability to meet its financial obligations.
He stressed that increasing government revenue should be a top priority, warning that without stronger revenue collection, Nigeria could struggle to repay existing loans and make the investments needed to improve infrastructure, healthcare and other critical sectors.
The World Bank official added that stronger public revenue would enable greater investment in infrastructure and human capital, help create jobs and support long-term poverty reduction.
His remarks come after the World Bank unveiled a new six-year partnership framework for Nigeria, which focuses on job creation through investments in infrastructure, healthcare, agriculture and digital connectivity.
