Kemi Adeosun, Nigeria’s minister of finance said Friday that the country’s debt level remains sustainable and under control with less than 20 percent to GDP ratio and as such could not be categorised a low-income country by the International Monetary Fund (IMF).
Tobias Adrian, the IMF financial counselor, and director of the Monetary and Capital Markets Department had on Wednesday said rising public debts in emerging economies could constitute a direct risk on financial stability.
Speaking to pressmen on the sideline of the G20 finance ministers and central bank governors meetings at the ongoing 2018 IMF and World Bank meetings in Washington DC, Adeosun said Nigeria had nothing to worry about.
In her words, “It is correct that debt levels in low-income countries is a threat but Nigeria is better described as a middle-income country.
“The concern that has been expressed, and it’s a legitimate one, is that debt levels in those countries are at 55 percent of GDP, which is very high, but Nigeria’s is at less than 20 percent,” she said.
The finance minister insisted that Nigeria is “not one of the countries they (IMF) have expressed concerns about, however, we will continue to manage our debt very, very responsibly.”
“We are at 20 percent of GDP and we do not intend to grow it aggressively. We are doing well at the moment as debt rate to revenue is going down gradually as we replace debt with revenue and refinancing our debt,” she said.
Adeosun said the government would keep monitoring and analysing its debt levels at every stage so that they don’t fall into the trap that most African States had fallen into.
The Minister, however, said that it was expedient for the government to borrow so as to save the country, which economy was near collapse as a result of the recession.
“There were two options. One was austerity, cut back, lay people off, and wait for the oil prices to rebound.
“The other was to be more aggressive by expanding the budget, take on more debt and invest in infrastructure in the hope that you will get growth going and then you will be able to develop more revenues.
“Step one, two and three of that have been done. We expanded our budget, we pumped money into the economy, we made sure that recession wasn’t prolonged and we are now back into growth.