Despite the rising debt profile especially from China, the International Monetary Fund (IMF) has predicted better times for Nigeria, stressing that financial conditions in Nigeria favoured more foreign investments.
This was disclosed by Evan Papageorgiou, Deputy Division Chief, Monetary and Capital Markets Department during a session with analysts after the presentation of the Global Financial Stability Report in Washington DC.
This is coming after the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva issued a warning about the global economy experiencing a synchronized slowdown in growth after which she advised Central Banks to reduce their lending rates.
What you should know: Nigeria’s total debt portfolio rose to N25.7 trillion as of June 30, 2019, compared to N24.9 trillion recorded in March 2019. That is, within three months, Nigeria increased its debt by N754.56 billion, representing a 3.2% increase. This is according to the statistics from the Debt Management Office (DMO).
IMF waded into the matter, saying the issue of debts in sub-Saharan Africa as well as Nigeria is becoming more pronounced.
“Not that the debt itself creates problems. We examine some issues that debt has to be used for productive purposes but usually debt that is given under non-Pan’s Club or multilateral types of agreements, more broadly in a lot of low-income countries, particularly a lot of Sub-Saharan African countries, the issue of debt vulnerabilities is becoming more and more prescient,” Evan said.
The IMF Financial Counsellor and Director of the Monetary and Capital Markets Department, Tobias Andrian asked that capital flows to Sub-Saharan Africa be utilized responsibly. He also predicted that more investments will flow into Africa.
“Flows of investment to Sub-Saharan Africa have been strong and are expected to reach record highs this year, so global financial conditions are favorable to countries such as Nigeria at the moment. Issuing bonds in hard currency and in domestic currency is currently possible because of the favorable global financial conditions.”