The International Monetary Fund (IMF) has highlighted Nigeria’s heavy debt-servicing obligations, urging the country to adopt innovative revenue mobilisation strategies to alleviate financial strain. Davide Furceri, Division Chief of the IMF’s Fiscal Affairs Department, made the recommendations at the IMF/World Bank Annual Meetings in Washington DC.
Nigeria currently allocates around 60% of its revenue to debt servicing, limiting its capacity to fund essential development projects, according to Furceri. While the debt service-to-GDP ratio has improved from nearly 100% to 60%, the IMF advised further efforts to reduce the revenue share dedicated to debt repayments.
To achieve this, Furceri emphasised broadening Nigeria’s tax base and implementing a transparent and efficient tax collection system. “It is essential to grow the revenue-to-GDP ratio,” he noted, stressing the importance of reforms in Nigeria’s fiscal operations.