High level of domestic interest payment unacceptable

The Director General, West African Institute for Financial and Economic Management (WAIFEM), Dr. Baba Musa, has described Nigeria’s domestic interest payment as unacceptable.

Speaking during a podcast at the African Development Bank Meetings in Egypt, Musa stated that the country’s current debt service stood at about N2 trillion of which about $3 billion was used for domestic interest payment alone.

He said, “When you compare it to the external which is just about $300 million, it is so unacceptable to have that high level of domestic interest payment.”

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He said fiscal pressures remained one of the biggest challenges confronting West African States particularly Nigeria, leading to, “very limited fiscal space.”

Musa added that the threat of food security, climate change as well as the crisis in Sudan had further posed risks to the country’s fiscal space.

He said, “The debt situation in almost all the countries was already at high risk of debt distress or moderate risks in some countries. All these shocks brought a lot of fiscal issues and necessitated governments to do some interventions that were not foreseen in the budget and also made them borrow more.”