Rising debts in the public and private sectors have become a source of worry to the International Monetary Fund (IMF), which described the development as anti-growth.
The IMF Assistant Director and Head of Fiscal Policy and Surveillance, Catherine Pattillo, at the ongoing IMF/World Bank yearly meetings in Washington DC, expressed concern that notwithstanding the recession challenges for Nigeria, the rising level of public debt needs to be checked.
According to Pattillo, while the debt profile is rising alongside inflation, it is getting more complicated with the rise in the cost of the servicing, which is about 45 per cent of the country’s estimated revenue.
She advised that increase in non-oil revenue as oil crisis persists is the way forward, while government minimises subsidies related to fuel, as well as effective public service reforms.
But, Minister of Finance, Kemi Adeosun, has accused developed countries and multilateral institutions of under-developing Nigeria.
Adeosun said while the country is looking for funds for development projects, Nigeria has hundreds of millions of dollars in Britain, Switzerland and the United States.
“They are significant sums. I think in Switzerland, we have $321 million, which has been there for 17 years with no interest, yet, we are borrowing in billions, and that is just from one person that looted the treasury,” she lamented.
Meanwhile, Nigeria and other emerging market economies are in for a fiscal boost as the World Bank’s private investment arm- International Finance Corporation (IFC) unveiled a $5 billion Infrastructure Investments in Emerging Markets.
The scheme, described as innovative, aims to raise $5 billion from global institutional investors to modernise infrastructure in emerging markets for the next five years.
Specifically, it is targeted at opening up a new stream of capital flows to improve power, water, transportation, and telecommunications systems in developing countries.