The President of the African Development Bank, Dr Akinwumi Adesina, has said Nigeria must resolve its debt challenges “decisively” to kindle economic growth.
He also called on the authorities to remove the structural bottlenecks that limited the productivity and the revenue earning potential of the huge non-oil sectors.
Adesina said this on Monday at the opening of a two-day mid-term ministerial performance review retreat heldat the State House Banquet Hall, Abuja.
The AfDB President who warned that Nigeria’s debt service to revenue ratio is high also acknowledged that the debt-to-GDP ratio remains “moderate.”
He said economic recovery is probable when Nigeria eliminates “structural bottlenecks” that limit the revenue-earning potential of non-oil sectors.
His said, “Nigeria must decisively tackle its debt challenges. The issue is not about the debt-to-GDP ratio, as Nigeria’s debt-to-GDP ratio at 35 per cent is still moderate. The big issue is how to service the debt and what that means for resources for domestic investments needed to spur faster economic growth.
“The debt service to revenue ratio of Nigeria is high at 73 per cent. Things will improve as oil prices recover, but the situation has revealed the vulnerability of Nigeria’s economy. To have an economic resurgence, we need to fix the structure of the economy and address some fundamentals.
“Nigeria’s challenge is revenue concentration, as the oil sector accounts for 75.4 per cent of export revenue and 50 per cent of all government revenue.
“What is needed for sustained growth and economic resurgence is to remove the structural bottlenecks that limit the productivity and the revenue earning potential of the huge non-oil sectors.”