The World Bank has said Nigeria’s major fiscal challenge is low government revenue rather than excessive borrowing, urging the country to focus on strengthening revenue generation to support long-term economic growth.
Speaking during an interview, the World Bank’s Country Director for Nigeria, Mathew Verghis, explained that Nigeria’s debt level remains moderate when compared with the size of its economy and is lower than that of many comparable countries.
According to him, Nigeria should not be viewed alongside countries facing severe debt challenges, noting that its current debt profile is not the country’s biggest financial concern.
Verghis stated that borrowing is a normal strategy used by governments to finance major investments whose benefits are realised over time, particularly in sectors that drive economic development.
He explained that projects such as expanding electricity access require substantial upfront funding but have the potential to improve productivity, stimulate economic growth and strengthen the country’s ability to repay borrowed funds.
The World Bank official stressed that Nigeria’s low revenue base poses a greater threat to public finances than its debt burden, warning that without stronger revenue mobilisation, the government may struggle to meet its financial obligations.
He added that increasing government revenue would provide more resources for critical investments in infrastructure, education, healthcare and other sectors that promote job creation and reduce poverty.
Verghis also noted that improving revenue collection would strengthen Nigeria’s fiscal position and support sustainable economic development over the long term.
His remarks come as the World Bank rolls out its new six-year Country Partnership Framework for Nigeria, which prioritises job creation through investments in infrastructure, agriculture, healthcare and digital connectivity.
