Shocking! Nigeria’s debt decreases from $181 million to $98 million

• In terms of financial management, the Nigerian government has achieved significant strides
• Wale Edun, the finance minister said when reviewing the economy's first-half performance
• The minister gave due credit to the contractors' on-time payments and the government's exit from the Ways and Means

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

With a sharp drop in debt service and a rise in non-oil earnings, the Nigerian government has made notable progress in managing its finances.

These encouraging outcomes were revealed by Finance Minister Wale Edun during an evaluation of the economy's first-half performance.

Non-oil revenue has increased at a never-before-seen rate, surpassing the results of the prior year. Photo Credit: FG
Source: Getty Images

The minister claims that in June 2023, the debt service ratio was an astounding 97%; by 2024, it had dropped to a much more reasonable 68%.

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The Nation reported that significant funds for vital industries such infrastructure, social services, healthcare, and education are made available by this large reduction in debt payment expenses. It also helps the government gain more credibility with foreign financial institutions and investors.

In addition, Nigeria's total debt, which is made up of both foreign and domestic obligations, has dropped. The debt in US dollars dropped from $181 million to $98 million.

The minister credited the government's withdrawal from the Ways and Means funding plan as well as the contractors' timely payments for their accomplishment.

Non-oil income has grown at an unprecedented rate in terms of revenue, outpacing the previous year's performance by an astounding 30%. This is a substantial amount more than what was planned for the first half of 2024.

The minister underlined the government's commitment to tax reforms while stressing the significance of diversifying revenue streams away from oil. The goal is to raise government revenue as a share of GDP from roughly 14–15% to roughly 25%, or nearly double that amount.

The government has put strong measures in place to improve revenue collection in order to attain these advantages, including the use of technology and the simplification of internal procedures at revenue-generating organizations.

Even though it still makes up a sizable portion of gross sales, oil revenue has decreased to 30% from 11% during the same period previous year.

The minister highlighted the government's data-driven strategy for guiding the economy in the correct direction while expressing pleasure with the progress done thus far.

IMF Names 10 African Countries Facing Biggest Debts

Legit.ng reported that African countries, including Nigeria, struggle with massive International Monetary Fund (IMF) debt burdens, showing a high total IMF credit outstanding.

The IMF extends credit to countries facing economic challenges while promoting global monetary cooperation.

The support causes economic reforms and policy changes such as fiscal restraint and improved governance.

Source: Legit.ng