The path that Nigeria’s debt is headed down is manageable. The country’s Minister of Finance, Zainab Ahmed, said on Wednesday that the government had no plans to borrow money from foreign capital markets and that it planned to make major changes to its large debt service-to-revenue ratio throughout the year.
The government of Nigeria spent 80% of its income on debt payments in the previous year, a ratio that the International Monetary Fund forecasts might grow to roughly 100% if current trends continue.
“Eighty per cent is not sustainable and our plan is that it is coming down to 60% in 2023,” Zainab Ahmed said in a Bloomberg TV interview, adding that the country expected to produce 1.6 million barrels of oil a day this year.
In December, after several senators raised concerns about Nigeria’s borrowing, the Senate decided to postpone a vote to convert $53 billion in central bank overdrafts to the government into 40-year bonds.
But after signing the 2023 budget into law, President Muhammadu Buhari warned that Nigeria would have to pay an additional 1.8 trillion naira ($4 billion) in interest if the National Assembly did not approve a loan-to-bond exchange request on the central bank’s overdrafts to the government.
