The worsening socio-economic condition of the Nigerian people is not likely to improve before the 2023 elections. This is because the International Monetary Fund (IMF) has warned high debtors, including Nigeria, to brace for turbulent times.
The disturbing warning is coming as IMF floated a $50 billion trust fund to shore up low-income and vulnerable countries for their balance of payments obligations.
Nigeria spent $520.78 million on external debt servicing in the third quarter of 2021, rising by 74.2 per cent against $298.9 million in the second quarter of last year, according to the Debt Management Office (DMO).
The rise was due to external debt which grew to $37.96 billion in the third quarter, up from $33.47 billion in the second quarter of the same year.
The 4 billion Eurobond raised from the international debt market to beef up external reserves above $40 billion also drove up foreign debt.
IMF gave the warning in blog post titled, “A Disrupted Global Recovery’ discussing its World Economic Outlook”, saying the recent shift in monetary policy can negatively affect emerging economies like Nigeria.
“As the monetary policy stance tightens, more broadly this year, economies will need to adapt to a global environment of higher interest rates.
“Emerging market and developing economies with large foreign currency borrowing and external financing needs should prepare for possible turbulence in financial markets by extending debt maturities as feasible and containing currency mismatches.
“In some cases, foreign exchange intervention and temporary capital flow management measures may be needed to provide a monetary policy with the space to focus on domestic conditions,” the IMF said.
