Zainab Ahmed, Minister of Finance, has stated that she disagrees with those who say Nigeria has a debt problem, saying that the country only has a revenue problem.
Ahmed stated this at the Nigeria International Economic Partnership Forum in New York.
The minister said Nigeria has set a debt-to-GDP ceiling at 40 percent, which the country is yet to exceed.
At the same event, Akinwumi Adesina, president of the Africa Development Bank. (AfDB) said Nigeria needs help to tackle its debt burden, which has now crossed the $100 billion mark.
Ahmed, who spoke after Adesina, however, stated that the problem is not debt, but revenue — pointing out that Nigeria’s revenue generation is low right now.
“¹Everywhere we go, we hear this issue of the debt of Nigeria is a problem and is not sustainable. The debt and debt financing that we do in Nigeria is following a designed debt management strategy,” she said.
“As of today, and this has been reported by two previous speakers, Nigeria’s public debt stock is $100.1 billion or N14.6 trillion, which represents 24 percent of the nominal GDP. This is below the 40% threshold that we have set up for ourselves.
“Nigeria operates a four year rolling medium term strategy which guides the borrowing strategy of the federal government. And we have specific indices that we closely monitor. The public debt that we set is 40 percent and we are at 24 percent.”
The minister further explained that “the portfolio composition between external and domestic is set at 30:70. So 70 percent of our debt is domestic and 30 percent is external. We also have a mix of long to short term financing and the mix is 75 to 25 and we are very well within this threshold”.
“So the medium term strategu show that the Nigerian debt portfolio is still operating within sustainable limits,” she stated.