According to the report Nigeria’s fiscal position deteriorated in 2022, leaving the cost of the petrol subsidy to increase from 0.7 percent to 2.3 percent of GDP. The World Bank has said Nigeria has spent 96.3% of its revenue in 2022 on servicing its debts. This was contained in the Macro Poverty Outlook for Nigeria: April 2023 brief released by the international financial institution.
According to the report Nigeria’s fiscal position deteriorated in 2022, leaving the cost of the petrol subsidy to increase from 0.7 percent to 2.3 percent of GDP.
“This has kept the public debt stock at over 38 percent of GDP and pushed the debt service to revenue ratio from 83.2 percent in 2021 to 96.3 percent in 2022,” it read.
“The fiscal deficit was estimated at 5.0 percent of GDP in 2022, breaching the stipulated limit for a federal fiscal deficit of 3 percent.”
Oil price booms have previously supported the Nigerian economy, but this
has changed since 2021.
The cause for this the IMF said was,” macroeconomic stability has weakened amidst declining oil production, costly fuel subsidies, exchange rate distortions, and monetization of the fiscal deficit.”
“In 2022, oil revenues, the fiscal deficit outturn, FX reserves, and economic
growth decoupled from the cycle of higher global oil prices. GDP growth decelerated from 3.6 percent in 2021 to 3.3 percent in 2022.”
“Growth was driven by manufacturing, construction, and most services. In contrast, the oil sector shrank by 19.2 percent. From the demand side, growth was driven by private consumption and investment.”
Credit: channelstv.com
