Sunday, June 5, 2026- The World Bank has stated that Nigeria’s biggest fiscal challenge is weak revenue mobilization rather than excessive borrowing, urging the government to prioritize efforts to boost revenue generation to support sustainable economic growth.
Speaking during an interview on Channels Television on
Friday, July 3, the World Bank Country Director for Nigeria, Mathew Verghis,
said Nigeria’s debt profile remains moderate by international standards and is
significantly different from countries experiencing debt distress
“From our assessment, Nigeria doesn’t have a high
indebtedness problem; it has a low revenue problem,” Verghis said.
He explained that Nigeria’s debt-to-GDP ratio is lower than
that of many comparable countries, stressing that concerns should focus on
improving government revenue rather than limiting borrowing.
“When we looked at the numbers, Nigeria is a moderately
indebted country, meaning it has less debt relative to its economy than most of
its neighbors and many other countries,” he said. “Nigeria is in a very
different situation than Ghana, for example, which is going through a debt
restructuring.”
Verghis defended government borrowing as a necessary tool
for financing long-term investments that stimulate economic growth and improve
living standards.
“Nigeria borrows for the same reasons that all countries
borrow. If you want to deliver results to people, the money available on an
annual basis is not enough. So you borrow, deliver results, and that improves
your ability to repay,” he said.
He cited the expansion of electricity access as an example,
noting that providing power to about 32 million Nigerians requires substantial
upfront investment.
“To be able to connect and provide energy to 32 million
Nigerians, Nigeria needs to borrow money now. But with increased access to
energy, the country will become wealthier and better positioned to repay the
loans,” he added.
The World Bank official, however, warned that low government
revenue poses a greater threat to Nigeria’s fiscal sustainability than its
current debt level.
“Nigeria’s debt is not particularly high, and in fact, it’s quite moderate by international standards. Its revenues are very low by international standards, and unless those revenues are raised, it will not be able to pay back debt,” Verghis said.
According to him, strengthening revenue mobilization would enable the government to increase investments in infrastructure, healthcare, education and other sectors that drive job creation, improve human capital and reduce poverty over the long term.
The remarks come as the World Bank recently unveiled a new
Country Partnership Framework for Nigeria spanning 2026–2032, which places job
creation at the center of its support for the country through investments in
infrastructure, healthcare, agriculture and digital connectivity
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