The World Bank has said Nigeria's biggest fiscal challenge is not excessive borrowing but poor revenue generation, urging the government to focus on increasing its income to support long-term economic growth and debt repayment.
"From our assessment, Nigeria doesn't have a high indebtedness problem; it has a low revenue problem," Verghis said.
According to him, Nigeria's debt-to-GDP ratio is lower than that of many comparable countries, meaning the country's level of borrowing is not the primary concern.
"When we looked at the numbers, Nigeria is a moderately indebted country, meaning it has less debt relative to its economy than most of its neighbours and many other countries.
"Nigeria is in a very different situation than Ghana, for example, which is going through a debt restructuring," he explained.
Verghis defended government borrowing, describing it as a normal practice used by countries to finance major infrastructure and development projects that improve economic growth and living standards.
"Nigeria borrows for the same reasons that all countries borrow. If you want to deliver results to people, the money available on an annual basis is not enough. So you borrow, deliver results, and that improves your ability to repay," he said.
He cited electricity expansion as an example, noting that connecting about 32 million Nigerians to reliable power requires significant upfront investment.
"To be able to connect and provide energy to 32 million Nigerians, Nigeria needs to borrow money now. But with increased access to energy, the country will become wealthier and better positioned to repay the loans," he added.
The World Bank official, however, warned that Nigeria's low government revenue remains a major threat to fiscal sustainability.
"Nigeria's debt is not particularly high, and in fact, it's quite moderate by international standards. Its revenues are very low by international standards, and unless those revenues are raised, it will not be able to pay back debt," Verghis said.
He added that stronger revenue mobilisation would enable the government to invest more in infrastructure, healthcare, education, agriculture and other sectors capable of creating jobs, reducing poverty and improving the country's long-term economic prospects.
His comments come as the World Bank rolls out a new six-year Country Partnership Framework for Nigeria, with job creation, infrastructure development, healthcare, agriculture and digital connectivity among its key priorities.
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