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Business News of Friday, 22 January 2021

Source: www.mynigeria.com

Debt servicing, greatest risk to Nigeria’s economy – Adesina

President of the African Development Bank, Dr. Akinwumi Adesina President of the African Development Bank, Dr. Akinwumi Adesina

President of the African Development Bank, Dr. Akinwumi Adesina has projected a growth rate of 1.5 per cent for Nigeria in 2021, and a 2.9 per cent growth in 2022.

The President, AfDB revealed this during his speech at the first national tax dialogue on Thursday, January 21, 2021.

According to him, the debt service payments posed the greatest risk to Nigeria, as a result of the shrinking oil revenues.

“We project that Nigeria’s economy is poised to recover to growth of 1.5 per cent in 2021 and 2.9 per cent in 2022, according to the African Development Bank’s soon to be released African Economic Outlook,” he said.

He stated in 2020, the economy shrunk by three per cent on account as a result of falling oil prices and the impact of the lockdowns on economic activity in the country.

Also, the coronavirus pandemic had a huge impact on budgetary balances and increased debt burdens.

He said that Nigeria’s debt-to-GDP ratio would push debt service payments beyond more than 60 per cent of federally collected revenues.

“With shrinkage in oil revenues, debt service payments pose the greatest risk to Nigeria,” he said.

In a publication sighted on punchng.com, Adesina hinted that AfDB estimated that Africa faced an additional financing need of $125-154bn by the end of 2020 to respond to the COVID-19 crisis.