By Editor
Nigeria is spending nearly five times more of its revenue on servicing external debts than on healthcare and education combined, according to a report by ActionAid International and ActionAid Nigeria.
The report, released on Tuesday, accuses the International Monetary Fund (IMF) of promoting policies that have weakened social spending and worsened economic hardship in the country.
The report reveals that Nigeria spends 20.1% of its national revenue on external debt payments, compared to 4.06% on health and 4.40% on education.
This disparity is stark, with debt servicing exceeding health spending in seven of the eight African countries studied.
ActionAid Nigeria’s Country Director, Andrew Mamedu, criticizes the IMF’s “double standards”, stating that the organization has failed to connect debt servicing with its implications for health and education funding.
The report argues that the IMF’s policies have placed a disproportionately heavier burden on low-income households without a corresponding increase in taxes on the wealthiest Nigerians.
The report also notes that the IMF advised Nigeria to increase its Value Added Tax (VAT) from 7.5% to 15% by 2026 and recommended higher excise duties on tobacco and alcohol. However, the IMF did not recommend increasing spending on the public workforce.
The Nigerian government’s debt burden has significant implications for the country’s socioeconomic development. The IMF has emphasized the need for Nigeria to adopt more effective revenue mobilization strategies to ease its financial burden.
The report highlights the need for fiscal discipline and prudent debt management, with a focus on redirecting resources towards critical sectors such as agriculture, health, and education. The current debt-to-GDP ratio hovers at 37%, with public debt escalating to N87.91 trillion.
The consequences of underinvestment in these sectors are far-reaching, with Nigeria facing significant challenges in achieving food security, supporting rural development, and stimulating economic growth. The report calls for urgent action to address the country’s debt crisis and prioritize investments in human capital development.
Editor -in-Chief MAHMOUD MUHAMMAD
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