Financial and economic experts have expressed concern over the International Monetary Fund’s debt service-to-revenue ratio projection for Nigeria.

The IMF predicted on Monday that Nigeria’s debt service-to-revenue ratio would rise from 76% in 2021 to 92% in 2022.

Experts, who spoke to our correspondent in separate interviews, said such a percentage would plunge the country into huge debts, worsen the poverty rate and aggravate the infrastructure deficit.

A development economist, Aliyu Ilias, said the government’s refusal to scrap gasoline subsidies could dramatically increase spending during the year, forcing the government to resort to borrowing to fill its growing budget deficit. .

He said: “The consequence will be a bigger infrastructure deficit; it will also make poverty worse, and forex will be a problem because we will have to go all out to borrow again. And when we do that, there will be more problems.

“Already the government said they will borrow around N6tn but now they have to keep the fuel subsidy with higher cost which has not been factored into the budget, that means the expenditure will increase , as is our budget deficit.

“Additionally, capital expenditure will be hit the hardest if the government continues its momentum, which means there will be no infrastructure for Nigeria. All the money can be spent on recurrent expenses, which will erode the development.

Ilias advised the government to look for better ways to generate revenue, such as widening its tax net and privatizing its assets.

An Economist and Professor of Economics at Olabisi Onabanjo University, Ogun State, Sheriffdeen Tella said, “The impacts will be poor growth and development because the money that should be spent on projects investment and development will be used to service the debt.

“Thus, we are unlikely to meet our growth expectations.”

He argued, however, that the government might not have to increase its borrowing if the price of crude oil continues to rise, as it is the government’s main source of revenue.

Cowry Asset Management Limited chief executive Johnson Chukwu said the IMF projection was expected as the government spent more than 70% of its revenue on debt servicing in November 2021.

He said the government could offset the negative consequences associated with its growing debt profile by removing unnecessary spending from its budget.

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