The International Monetary Fund, IMF, has called on Nigeria
and other Sub-Saharan African countries to reduce the fiscal deficit by three
per cent to avoid debt crises.
The IMF disclosed this on Tuesday in a report by its
economist, Fabio Cormelli.
The development comes as Nigeria’s fiscal deficit to Gross
Domestic Product, GDP, ratio fell to 5 per cent in 2022 from 6.3 per cent in
2021.
As a solution, the IMF advised Nigeria and Sub-Saharan
countries to set a course by re-anchoring fiscal policy through a credible
medium-term strategy and prepare by undertaking fiscal adjustment to bring debt
back to a safer level.
“IMF staff analysis shows that most countries in the region
must reduce their fiscal deficits in the coming years. The average country’s
adjustment amount is about 2 to 3 per cent of GDP.
“This adjustment seems feasible given historical
experience—in the past, countries in sub-Saharan African countries improved
their primary balance by 1 per cent of GDP a year over two to three years,” Cormelli
said.
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