FG to Reduce Debt Service to Revenue to 60% to Enhance Economic Growth in 2023

The federal government has unveiled strategic moves to improve the nation’s economy in the year 2023.

This is as it planned to significantly cut down its debt service-to-revenue ratio from 80 percent to 60 percent and increase revenues from the non-oil sector.

The Minister of Finance, Zainab Ahmed mentioned these during a Television interview while speaking on the federal government’s moves to sustain the economy.

Ahmed noted that the 80 percent debt servicing is hurting the economy, hence the move for its reduction.

She, however, emphasised that the situation will be balanced by greatly reducing costs which influenced the announcement of fuel subsidy removal by June and increasing sources of revenue.

Her words, “80 percent is not sustainable and our plan is coming down to 60 percent in 2023 and how are we doing that? We are doing that by increasing revenues and by significantly reducing costs to enable us to cope.

“There are some costs that we can pull back on, though not in the economy, but there are some costs that we must sustain such as provisions for education and health as well as infrastructure.

“So, once we pull the first subsidy out, production of crude oil increases and then we sustain the improvements we have put in place in terms of non-oil revenue, then we should be able to come down to 60 percent debt-to-revenue.”

Investors King learnt that the 80 percent ratio of Nigeria’s debt servicing cost to its revenue is far above the World Bank’s recommended ratio which is 22.5 percent for developing nations like Nigeria.

The Finance minister noted that though the non-oil sector will be explored in 2023 to increase its revenue, the oil sector will also not be left behind. 

She expressed optimism that Nigeria will produce beyond the 1.69 million barrels of oil per day stipulated in the 2023 budget, despite its woes in 2022.

“Production has picked up and it looks good to continue to reach the numbers that we have put in the budget. Our target is 1.6 million barrels per day and we can comfortably achieve that,” Ahmed said