Nigeria’s Debt Risk Remains Moderate – AfDB

• Nigeria’s Debt Risk Remains Moderate – AfDB

The African Development Bank has said despite Nigeria’s public debt rising to $73.2 billion between 2017 and 2018, representing about 17.5 percent of the economy, ‘Nigeria remained at moderate risk of debt distress.’

In its Nigeria Economic Outlook for 2019, the also said services continued to support the economy and account for half of the Gross Domestic Product, higher than the 10 percent from the oil sector and 22 percent from Agriculture.

“Growth in agriculture was lackluster, due partly to clashes between farmers and herders coupled with flooding in key middle-belt regions and continued insurgency in the northeast,” the report stated.

AfDB highlighted the new government strategy at mitigating the high cost of borrowing by prioritising foreign debt.

“In November 2018, the government issued a Eurobond of $2.9bn which reflects its new debt management strategy of prioritising foreign debt to mitigate the high financing costs of domestic borrowing.”

“Furthermore, relatively strong oil receipts solidified the current account surplus to an estimated 3.7 percent and bolstered improvements in the terms of trade by about 13 percent in 2018 alone.”

The report added, “The growing importance of services has bolstered growth in the economy. The sector accounts for about half of GDP, dwarfing the 10 percent from oil and 22 percent from agriculture.

“Real GDP growth was an estimated 1.9 percent in 2018, reflecting a recovery in services and industry – particularly mining, quarrying and manufacturing. The recovery benefited from greater availability of foreign exchange.

“Growth in agriculture was lacklustre; due partly to clashes between farmers and herders coupled with flooding in key middle-belt regions and continued insurgency in the North-East.”