Monday, February 6, 2023

Fuel subsidy, security budget to worsen Nigeria’s fiscal deficit, increase public debt to 43%: IMF

The IMF said Nigeria’s fiscal deficit was going to worsen if the Buhari regime did not come up with a bold revenue mobilisation strategy.

• November 19, 2021
President Muhammadu Buhari, and Kristalina Georgieva, Managing Director of IMF
President Muhammadu Buhari, and Kristalina Georgieva, Managing Director of IMF

The International Monetary Fund IMF on Friday said Nigeria’s fiscal deficit will worsen in 2021 and public debt increase to 43 per cent in five years if the Muhammadu Buhari regime does not put an end to “implicit fuel subsidies and higher security spending.”

In a publication, the fund explained that despite the rise in oil prices, the country’s fiscal deficit will worsen to 6.3 per cent in 2021 and will rise further if the Buhari regime did not come up with a bold revenue mobilisation strategy.

“Despite much higher oil prices, the general government fiscal deficit are projected to widen in 2021 to 6.3 per cent of GDP,” IMF said in its report.

The fund said the projected fiscal deficits reflects “implicit fuel subsidies and higher security spending, and remain at that level in 2022.”

It also highlighted spending pressures associated with the electoral cycle and downside risks associated with the COVID-19 pandemic as other factors responsible for the country’s worsening fiscal deficit.

The report emphasised that fiscal deficits are projected to stay elevated with a 43 per cent increase if the government fails to make bold revenue mobilisation efforts.

“Fiscal deficits are projected to stay elevated above the pre-pandemic levels with public debt increasing to 43 per cent in 2026,” the report added.

In October, the IMF said that the economic recovery of Nigeria and other sub-Saharan nations will be slowest and lagging behind developed nations.

In its report titled regional economic outlook for sub-Saharan Africa, it projected the region’s economy to grow by 3.7 per cent and 3.8 per cent for 2021 and 2022 respectively.     

We have recently deactivated our website's comment provider in favour of other channels of distribution and commentary. We encourage you to join the conversation on our stories via our Facebook, Twitter and other social media pages.

More from Peoples Gazette

Christian Atsu


Christian Atsu found alive hours after being trapped under rubble from Türkiye earthquake 

Twin earthquakes rocked Türkiye and Syria in the early hours of Monday, leading to the death of more than 2,300 people.

Governor Aminu Masari and Bola Tinubu


Tinubu donated N100 million to victims of banditry in Katsina: Masari 

The governor said that the APC presidential candidate gave the donation to be distributed to all victims of insecurity in the state.

Bola Tinubu and Teslim Folarin


Nigeria, Oyo need “new nation handlers” like Tinubu, Folarin: Group

The group also supported the governorship and presidential candidates with billboards, banners, posters, stickers, and shirts.

Atiku Abubakar in Benue state


I will return peace to Benue, promote agriculture: Atiku

The PDP candidate revealed that the measures he will adopt is for the Fulani and Tivs to sign a peace accord.

Road Safety Officiers


FRSC to screen vehicles, drivers for election duties in Zamfara

The corps said safe and timely delivery of election materials was imperative to free, fair and credible elections in the country.

Permanent Voters Cards (PVCs) used to illustrate the story


Immigration seizes 106 voter cards from foreigners in Kwara

Foreigners from Niger Republic, Ghana and Benin Republic were caught with PVCs during a patrol by immigration officers within the Ilorin metropolis.