) has said Nigeria’s N87.3 trillion total public debt position is manageable and does not present any risks to the economy.
He said the assessment of debts should not be based on the nominal value of a debt stock but on how it relates to many other economic variables.“So yes, it’s at the highest level because you mention it in naira terms but as a ratio to Gross Domestic Product and as a ratio to many other indicators is what you have to look at.
“While there is not enough tax revenue, I think in the past reliance on oil when prices were high, and second is the subsidy regime which also implies and entails lots of government resources being directed where they should not be. These are all interlined issues including causing some of the inflation that you see. The IMF also backed the Central Bank of Nigeria for removing forex restrictions placed on 43 items that can be produced locally.
The IMF director said Nigeria has incredible potential, with the reforms moving in the right direction in recent months. The Fund said fiscal discipline will support Nigeria’s drive for exchange rate stability. “What is needed, we feel, is making the reforms holistic. So, the exchange rate reforms that the government did was very welcome as it is trying to unify the rates. Similarly, the fuel subsidy will not help or stick unless they tighten monetary policy.
Of course, the tax policy you can also use if you really want to lean against certain types of import etc. In general, I think the direction CBN has moved in is a helpful one.
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