President Bola Tinubu has disclosed that Nigeria’s debt service-to-revenue ratio has declined from approximately 97% in May 2023, when he assumed office, to 65% currently, representing 32% drop during the period.
Tinubu, who made this disclosure while swearing in seven new ministers at the Council Chamber of the State House, Abuja, maintained that his administration had managed to keep the country going, despite inheriting an economy on the brink of bankruptcy.
He said: “For us, it was a challenge when the nation was servicing its debt with 97 per cent of its revenue. It was nothing but the edge of the cliff.
“But today, I can report to you that we have brought that down to 65 per cent, and we have never defaulted in meeting all obligations, both foreign and domestic.
“We have our head above water. All other countries around us and across the world are also facing challenges”, the President stressed.
Tinubu expressed optimism about the nation’s economic recovery outlook, noting that the country is on a good path despite the surging cost of living associated with his administration’s reforms, particularly the negative impacts of the fiscal and monetary policy measures.
The President further clarified: “We have taken the bull by the horns. We have stopped the scavengers. We will fully put an end to the profiteers and smugglers of our resources across the country. We are not shirking our responsibility; we are confronting it head-on.
“Economic recovery is on the horizon. We are on a good path to realise our dreams, not just for us, but for our children and grandchildren.
“Despite the challenges, we must undertake the job of re-engineering and retooling this country’s economic path. Yes, the cost of living has risen. I acknowledge that. We have fulfilled our obligation of paying a new minimum wage across the board…we are navigating through this and working diligently”, he added.
Tinubu’s clarification came on the heels of the recent Africa Export-Import Bank’s (Afreximbank’s) forecast that Nigeria’s debt service-to-revenue ratio could reach 110.4% this year.
The bank had in its ‘Nigeria Country Brief 2024’ published in July this year reported that Nigeria’s “debt service-to-revenue ratio has increased significantly, from 33.8% in 2017 to a projected 110.4% in 2024, signalling potential difficulties in meeting debt servicing obligations relative to revenue generation.”
An analysis of the report reflected that it focused mainly on Nigeria’s economic performance, trade dynamics, fiscal policies, and financial sector developments.
The data in the brief showed that Nigeria’s debt servicing bill consumed 66.9% or N5.79 trillion of the total revenue of N8.65 trillion in the first nine months of 2023, compared to 99.3% or N4.23 trillion in the corresponding period of the preceding year.
