The International Monetary Fund (IMF) has urged Bola Tinubu’s prospective administration to diversify the nation’s income sources.
This statement was made by Ari Aisen, resident representative for the IMF’s Nigeria office, during a virtual discussion on Nigeria’s debt situation.
He also advised the incoming administration to substantially reduce its reliance on debt to cover expenses.
Aisen argued that Nigeria’s debt problems should be primarily addressed by focusing on revenue and expenditure.
According to him, the federal government was spending more than it was bringing in through taxation, which exacerbated the debt problem.
“How do you reduce the government’s expenditure needs? This should be the inquiry. It boils down to fiscal discipline. People should not consistently spend more than they generate in income, as this is unsustainable.
“Eventually, some borrowers will return to ask for their money back, while others will refuse to make additional loans,” he said.
Vahyala Kwaga, a Senior Research and Policy Analyst at the Nigerian startup BudgIT, urged the incoming administration to rectify the disparity between the fiscal and monetary authorities. Kwaga asserts that a substantial amount of money is being invested in the economy and that this has an impact.
“The Ways and Means is another lump sum of money that substantially impacted the economy by exacerbating the problem of inflation. According to the president, a significant portion of these funds were allocated to infrastructure initiatives. Some were also given as subsidies to state governors, he said.
Kwaga observed that a substantial amount of money is being invested in the economy, and that this has an impact. “Ways and Means is another lump sum of money that significantly affected the economy by exacerbating the problem of inflation,” he said.
According to the president, a significant portion of these funds were allocated to infrastructure initiatives. Some were also given as subsidies to state governors, he added.
He urged Nigerians to scrutinise the financial practises of state governors.
