The World Bank has revealed that Nigeria used 96.3 per cent of its revenue generated in 2022 to service debt, noting that the constant fiscal deficit has aggravated the nation’s public debt stock.
This was contained in the Macro Poverty Outlook for Nigeria; April 2023 released by the World Bank.
“The fiscal position deteriorated. In 2022, the cost of the petrol subsidy increased from 0.7 per cent to 2.3 per cent GDP. Low non-oil revenues and high-interest payments compounded fiscal pressures”, the report read.
“The fiscal deficit was estimated at 5.0 per cent of GDP in 2022, breaching the stipulated limit for a federal fiscal deficit of 3 per cent. This has kept the public debt stock at over 38 per cent of GDP and pushed the debt service to revenue ratio from 83.2 per cent in 2021 to 96.3 per cent in 2022.”
The World Bank further stated that the naira scarcity which was created by the implementation of the CBN’s naira redesign policy hampered the country’s economic growth and poverty reduction efforts, projecting that about 13 million Nigerians would become poor between 2019 and 2025.