By Sabiu Abdullahi
The World Bank has said Nigeria’s main fiscal challenge is poor revenue generation rather than excessive borrowing.
Mathew Verghis, the World Bank’s Country Director for Nigeria, stated this during an interview on Channels Television on Friday.
He explained that Nigeria’s debt burden remains moderate when compared with many countries of similar economic size.
“From our assessment, Nigeria doesn’t have a high indebtedness problem, it has a low revenue problem,” Verghis said.
According to him, the country’s debt level, when measured against the size of the economy, is lower than that of several neighbouring nations and should not be likened to countries facing serious debt crises.
“When we looked at the numbers, Nigeria is a moderately indebted country, meaning it has less debt relative to its economy than most of its neighbours and many other countries,” he said.
“Nigeria is in a very different situation than Ghana, for example, which is going through a debt restructuring.”
Verghis argued that borrowing remains necessary for governments seeking to finance major projects that require large investments before long-term benefits can be achieved.
“Nigeria borrows for the same reasons that all countries borrow. If you want to get results, if you want to deliver results to people, then the money that you have on an annual basis is not enough,” he said.
“So you borrow, you get results, and that will improve your ability to pay back.”
The World Bank official cited the expansion of electricity access as one of the areas where Nigeria would need substantial funding.
“To be able to connect, to give energy to 32 million Nigerians, Nigeria needs to borrow money now,” Verghis said.
“But that money, with that increased access to energy, Nigeria will become a wealthier country, and it’ll be then possible to pay back.”
He, however, warned that weak government revenue could create challenges for debt repayment if authorities fail to improve revenue collection.
“Nigeria’s debt is not particularly high, and in fact, it’s quite moderate by international standards,” he said.
“Its revenues are very low by international standards, and unless those revenues are raised, then it will not be able to pay back debt.”
Verghis added that stronger revenue generation would help government invest more in infrastructure, healthcare, agriculture, and human capital development. He said such investments would support job creation and reduce poverty over time.
The World Bank recently introduced a new six-year Country Partnership Framework for Nigeria. The programme focuses on employment generation through investments in critical sectors, including infrastructure, healthcare, agriculture, and digital connectivity.
