The Director-General of the World Trade Organization (WTO), Dr. Ngozi Okonjo-Iweala, has cautioned the Nigerian government about the alarming debt service to revenue ratio and urged the 36 state Governors to control expenditure and watch their debt profiles.
She made this call during the induction program for re-elected and elected governors organized by the Nigeria Governors’ Forum (NGF) on Monday, May 15, 2023, in Abuja.
“The debt service to revenue ratio is certainly alarming, at 83.2 per cent in 2021 and 96.3 per cent in 2022, according to the World Bank. This means that at the federal level, after servicing our debt there is little room to pay for recurrent expenditures, let alone investment,” Okonjo-Iweala said.
“Excellencies, please watch your debt profiles, and keep careful control of expenditures, even as you invest in infrastructure, education, and basic health systems. Please endeavor to pay teachers, health workers, and others their salaries, and retirees their pensions.”
During her speech on the theme “Task of Nation Building,” the WTO boss painted a bleak picture of the nation’s economy, urging the governors to adopt best practices that can assist them in fulfilling their promises to the electorate.
“Nigeria’s gross debt has risen significantly from N19.3 trillion in 2015 to $N91.6 trillion in 2023, with the debt-to-GDP ratio almost doubling from 20% to 39%,” she said. “While the debt-to-GDP ratio may not look so alarming, as revenues decline, the burden of debt servicing has increased dramatically.”
Okonjo-Iweala emphasized the importance of paying salaries, pensions, and investing in infrastructure, education, and health systems while urging caution in debt profiles and expenditure control.
On the country’s economic activity, Okonjo-Iweala stated, “The International Monetary Fund projects 3.2 per cent Gross Domestic Product growth this year and 3 per cent next year – slightly better than global growth but underperforming the projected growth rates for sub-Saharan Africa as a whole, which are at 3.6 per cent and 4.2 per cent respectively.”
She further added, “The current GDP growth rates are higher than the very low 1.2 per cent average annual growth rate registered between 2015 and 2019, the five years before the pandemic, but well below the 6.4 per cent average for the preceding five-year period, from 2010 to 2014.”
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