The IMF predicted that it would happen in 2026 but their model is really off by years. Yes, Nigeria has entered a new chapter in its reckless economic shipwrecking: “Nigeria’s fiscal position worsened in the first four months of the year as the cost of repaying debt surpassed the government’s revenue in the first quarter of 2022.” Simply, we as a people work for servicing debts.
The International Monetary Fund (IMF) has warned that debt servicing may gulp 100 percent of Nigeria’s revenue by 2026, if the government fails to implement adequate measures to improve revenue generation.
The IMF’s Resident Representative for Nigeria, Ari Aisen, disclosed this while presenting the Sub-Saharan Africa Regional Economic Outlook report on Monday, 30th May 2022 in Abuja.
According to him, based on a macro-fiscal stress test that was conducted on Nigeria, interest payments on debts may wipe up the country’s entire earnings in the next four years.
(IMF predicted a full year in 2026, this is a quarter and that means that IMF is technically correct since Nigeria can recover next quarter and have the revenue receipts exceeding debts servicing obligations.)
I do not know what to write other than to point out that Naira will experience more pressure. I had noted that N700/$ by Dec 2022 is a possibility if we do not try new ideas since whatever we are doing now is not working. This is not a political statement; this is a statement from a concerned citizen.
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Nigeria has a quagmire: crude oil price cannot go sideways – it can only move up or down. The problem for Nigeria is that when the price goes up, it makes more money in the international market but also spends more to subsidize petrol since it has to import the by-product. And when the price drops, Nigeria does not make as much money internationally, affecting many things. But since prices can only go up or down, NOT sideways, we are in a mess. Interestingly, we do not have a solution on how to fix that problem.
Nigeria’s fiscal position worsened in the first four months of the year as the cost of repaying debt surpassed the government’s revenue in the first quarter of 2022.
According to details of the 2022 fiscal performance report for January through April, Nigeria’s total revenue stood at N1.63 trillion while debt servicing stood at N1.94 trillion, showing a variance of over N300 billion.
Nigeria’s Minister of Finance, Budget and National Planning, Zainab Ahmed, on Thursday warned that urgent action is needed to address the nation’s revenue challenge and expenditure efficiency at both the national and sub-national levels.
The report showed that gross oil and gas federation revenue for the first four months of the year was projected at N3.12 trillion but as at April 30, only N1.23 trillion was realised, representing a mere 39% performance.
Get your PVC – 2023 is becoming exceedingly important for the future of Nigeria.
Tekedia has more reports on this here.
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Comment: Subsidy is not the problem. Excess spending on Subsidy is the problem. The other issue is the lack of think thank group designing operations model for the country. The executive are there to execute, judiciary to interpret law, legislation for policy. Who is designing how they along with other apparatus in the country blends in? This is where the issue lies!
My Response: “The other issue is the lack of think thank group designing operations model for the country. ” – I actually think we have many think tanks. What we do not have is DO tanks.
Comment follow: ok sir, but a think thank will control, influence and enforce things at all levels.
My response: ” but a think thank will control, influence and enforce things at all levels.” – Only in America, Europe, etc. In Nigeria, who cares when universities can be on strikes for months. The biggest think tank in a nation is the university system. If you can shut it down for months, you get the idea that no one cares….
Debt Servicing Gulped N310bn More Than Revenue Generated by Nigeria in First Four Months of 2022
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The major question now is, how can we delicately manage this disaster of a people that captured power for the sake of power? It’s looking increasingly difficult to wait this catastrophe out till May 2023, it’s as if we could be buried deep inside the ground by then.
The problem is not just that we are in trouble, rather it’s the fact that there’s zero knowledge and capacity on what to do in order to get out of the mess. This level of ineptitude is both suffocating and exasperating.
And the mercenaries are warming up themselves again to take another shot at the presidency, God forbid bad thing.
Both physical and spiritual warfare will be deployed in the coming election, no economic bandit will succeed this time; it’s a fight to finish.
I need money