Nigeria Recovery Slows

The recent rise in Nigeria’s debt profile and continued decline in the external reserves are slowing down the recovery and growth of the economy. Experts attribute the disturbing situation to the approaching general elections in February next year and the exit of foreign portfolio investors for fear of losing their investments, Punch reported. The International Monetary Fund in March identified the major problems of the Nigerian economy as huge fiscal deficit, low economy diversification, increasing domestic risks, and rising banking sector risks, all of which still persist till date. The IMF report, titled ‘Article IV consultation on Nigerian economy for 2018’, noted that increasing debt accumulation by the government was an indication of weak revenue mobilization by the government. It was discovered that despite the tax drive of the current government, it still heavily relied on external debt to fund its annual budget. The nation’s total debt stood at $74.2 billion, according to data from the Debt Management Office on August 10. According to the IMF, bond-raising programs of the government have also crowded out the private sector, reducing the credit-raising opportunities for private businesses.