A new report by the United Nations Conference on Trade and Development (UNCTAD) stated that crude oil theft, production decline, and debts are posing a threat to Nigeria’s weakened finances.
The report titled: “April 2023 Trade and Development Report Update,” also highlighted some of the actions that can be taken to salvage the economic crises.
Since 2022, Nigeria has been struggling with a decline in oil production which has resulted in declining revenues, and this has increased the country’s debt burden.
“Continuing decline of oil production, accompanied by large-scale oil theft, poses a main threat to strained finances in Africa’s most populous nation.”
The National Bureau of Statistics noted that Nigeria’s public debt rose from N42.84 trillion (103.31 billion dollars) in the second quarter of 2022 to N44.06 trillion (101.91 billion dollars) in the third quarter of 2022.
The UN recommended global debt architecture, open data standards for debt management, and debt sustainability evaluations that take into account the need for financing for development and the fight against climate change.
The report thus emphasized the requirement for an international debt architecture to provide for the prompt and orderly settlement of debt crises and enhance debt transparency.
The report suggested that debtor countries and creditors have the necessary tools and resources to manage debt effectively, including the use of open data standards and public exchange of information.
This can be accomplished through the establishment of a public debt registry for developing countries.
Further, the report remarked on designing debt sustainability assessments that incorporate development and climate financing needs.
These assessments should be the basis for a multilateral debt relief initiative aligned with delivering on Sustainable Development Goals and tackling climate change.
The report also recommended that there should be a provision for a framework that addresses debt crises that is fair to both debtor countries and creditors, and that considers the broader development needs of the former.
This can be accomplished through the establishment of a sovereign debt workout mechanism that would engage with all relevant creditors and debtor interests, would provide an effective, efficient, and equitable mechanism for debt restructuring as well as support sound sovereign debt markets