The World Bank has said Nigeria's biggest fiscal challenge is weak revenue mobilisation rather than excessive borrowing, urging the government to boost revenue generation for sustainable economic growth.
Speaking on Channels Television on Friday, World Bank Country Director for Nigeria, Mathew Verghis, said Nigeria's debt profile remains moderate by global standards and differs from countries currently facing debt distress.
"From our assessment, Nigeria doesn't have a high indebtedness problem; it has a low revenue problem," Verghis said.
He explained that Nigeria's debt-to-GDP ratio is lower than that of many comparable nations, stressing that the focus should be on improving government revenue rather than restricting borrowing.
"When we looked at the numbers, Nigeria is a moderately indebted country," he said, adding that Nigeria's situation is "very different from Ghana," which is undergoing debt restructuring.
Verghis defended borrowing as a necessary tool for long-term investments that drive growth and improve living standards.
"Nigeria borrows for the same reasons that all countries borrow. If you want to deliver results to people, the money available on an annual basis is not enough. So you borrow, deliver results, and that improves your ability to repay," he said.
Citing electricity as an example, he noted that Nigeria needs to borrow to connect about 32 million people to the grid, and that increased access would strengthen the economy and its repayment capacity.
He warned that low revenue poses a greater threat than the debt level itself.
"Nigeria's debt is not particularly high… Its revenues are very low by international standards, and unless those revenues are raised, it will not be able to pay back debt," he said.
He added that stronger revenue mobilisation would support investment in infrastructure, healthcare, education, agriculture, and digital connectivity, while creating jobs, improving human capital, and reducing poverty.
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