IMF describes Nigeria’s debt servicing ratio as extremely high

THE International Monetary Fund, IMF, has once again expressed concerns about Nigeria’s debt servicing capacity, as the size of the total debt keep rising against its revenue. Mrs Catherine Pattillo, Assistant Director, Fiscal Affairs Department, IMF, described the country’s debt to revenue ratio, which she put at 63 percent, as “extremely high.” She, therefore, recommended that in line with the IMF staff report on Nigeria, the Fund would want to see increases in tax rates and collection capacity to help reduce government’s budget deficit while financing key development projects. So building revenue is key and how do you do that? The recommendation in the IMF staff report is to broaden the tax base by removing exemptions, to rationalize tax incentives, in particular, to strengthen tax compliance and our recommendation to raise the VAT rate.” Read more