- Nigeria is in debt up to its neck due to the insecurity raging in the country, according to the Minister of Finance, Budget and National Planning, Zainab Ahmed.
- She also said that low incomes and the inability to meet the country’s OPEC quota are also to blame for why Nigeria borrows more money.
- Ahmed admitted Nigeria’s debt profile is high, but said it is also viable but faces the challenge of service as the country is “technically at war”
Minister of Finance, Budget and National Planning Zainab Ahmed said Nigeria borrows more money due to insecurity and low income.
She also said the country had not been able to meet the Organization of the Exporting Countries (OPEC) quota for oil production in recent years.
She said this on Wednesday, January 7, 2022, during the public presentation of the 2022 budget proposal and its breakdown in Abuja.
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Low debt-to-GDP ratio
According to the Guardian, the minister insisted that Nigeria’s debt-to-GDP ratio is low compared to that of some African countries. In November 2021, the ratio stood at 76%. She said Nigeria’s most pressing need is not debt sustainability but income.
Ahmed also said the reason the country has imposed an excise tax of N 10 per liter on soft drinks is to reduce the health risks associated with their consumption.
She admitted that Nigeria’s outstanding debt is of concern and said Nigeria’s budget deficit to GDP, which was -4.3% in November last year and the debt ratio of 30% in September 2021 was the lowest in Africa.
Low VAT rate, the lowest in Africa
According to her, tax rates and compliance percentages are very high in other countries.
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She also said Nigeria’s value added tax (VAT) is the lowest in Africa at 7.5%.
“To make matters worse, the country is technically at war, with security concerns pervasive throughout the country. This required massive expenditure on equipment and security operations, contributing to the budget deficit. The Defense and Security sector represents 22% of the 2021 budget.
Nigeria’s debt has tripled in seven years, activist says
Legit.ng also reported that human rights activist Chidi Odinkalu said Nigeria’s debt profile has increased three times in the past seven years, that is, since Muhammadu Buhari rose in the saddle as President of Nigeria.
Odinkalu said this in a tweet but did not explain as he only provided an undated Nigeria Bureau of Statistics (NBS) chat.
Odinkalu may not be an economist, but data available from the Debt Management Office (DMO) indicates that Nigeria’s debt profile recently climbed to around 35.6 trillion naira due to the increase. loans from the government of Buhari.