The International Monetary Fund (IMF) on Wednesday says Nigeria’s net debt will rise to 25.6 percent of its Gross Domestic Product (GDP) in the next two years (2020) from 17.5 percent in 2017.
IMF puts Nigeria’s current net debt to GDP at 21.6 percent in 2018. Kenya’s net debt which is currently at 51.6 percent of GDP is expected to drop to 51.2 percent by 2020. Ghana’s net debt also is to drop to 59.5 percent of GDP by 2020 from 64.4 percent in 2018. The numbers were tracked from the fiscal monitor report released after a briefing by Victor Gaspar, director, fiscal affairs department, IMF. Gaspar said global debt has continued to rise in 2017, reaching a new record high at $182 trillion and that in the last 10 years between the Asian financial crisis and the global financial crisis, global debt has more than doubled.
The Fund urged Nigerian government to reduce tax evasion, increase taxes on tobacco, and alcohol, increase its tax audit as well as reduce corruption as part of measures to enhance its tax administration. Paolo Mauro, deputy director, fiscal affairs department, IMF gave the advice at a press briefing on fiscal monitor at the ongoing IMF/World Bank Group annual meetings in Bali, Indonesia.
“We have been discussing over the years with the government, and we see the priorities in tax administration, but there are also aspects of tax policy that would help. So, certainly, in the tax administration, to increase the compliance rate, something that could be done is to increase tax audits, to use e-filing to a greater extent”, Mauro said. Speaking further, he said, “I think it is not just the revenue side; it is also the spending side.
Clearly, improving the choices that one makes on which infrastructure projects, how does one go about selecting the ones that are really going to boost growth. So, I think, definitely, it is a priority to increase revenues, but also to be careful about, what are the ways in which we can make spending more efficient”. Looking at low-income developing countries, Gaspar said a key challenge for this group of countries is to improve people’s livelihoods by meeting the Sustainable Development Goals (SDGs) by 2030. According to him, most low-income developing countries face substantial spending needs to achieve SDGs. These additional spending needs for some specific sectors represents 14 percentage points of GDP in the aggregate and that corresponds to $520 billion, or about 0.5 percent of global GDP.