The World Bank has said Nigeria’s greatest fiscal challenge is not excessive borrowing but weak revenue generation, urging the government to focus on boosting public revenue to drive economic growth and meet its development goals.
Speaking during an interview on Channels Television on Friday, the World Bank’s Country Director for Nigeria, Mathew Verghis, said the country’s debt level remains moderate by international standards and is far from the situation faced by nations struggling with debt crises.
“From our assessment, Nigeria doesn’t have a high indebtedness problem; it has a low revenue problem,” Verghis said.
He explained that Nigeria’s debt-to-GDP ratio is lower than that of many comparable economies, stressing that improving government revenue should take priority over concerns about borrowing.
“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,” he said.
“Nigeria is in a very different situation than Ghana, for example, which is going through a debt restructuring.”
Verghis defended government borrowing, describing it as a necessary tool for financing major infrastructure and development projects that can improve citizens’ quality of life and strengthen the economy over time.
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.
Despite describing Nigeria’s debt profile as manageable, the World Bank official warned that the country’s low revenue base 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 stressed that stronger revenue mobilisation would enable the government to invest more in infrastructure, healthcare, education and other critical sectors capable of creating jobs, improving human capital and reducing poverty.
Verghis’ remarks come as the World Bank rolls out its new six-year Country Partnership Framework for Nigeria, with a strong focus on job creation through investments in infrastructure, healthcare, agriculture and digital connectivity.
