In a significant economic update, President Bola Tinubu revealed on Monday that Nigeria’s debt service-to-revenue ratio has fallen from 97% when he took office to 65% today, underscoring the resilience of his administration in keeping the country financially afloat despite an initial threat of bankruptcy. This announcement came as Tinubu swore in seven newly appointed ministers at the Council Chamber of the State House in Abuja.
"For us, it was a challenge when the nation was servicing its debt with 97% of its revenue. It was nothing but the edge of the cliff,” Tinubu stated, reflecting on the fiscal strain he inherited upon assuming office. “But today, I can report to you that we have brought that down to 65%, and we have never defaulted in meeting all obligations, both foreign and domestic.”
The President’s comments come on the heels of Afreximbank’s recent warning that Nigeria’s debt service-to-revenue ratio could rise to 110.4% by 2024 unless corrective fiscal policies are enacted.
Afreximbank’s July report noted that, as of the first nine months of 2023, Nigeria’s debt servicing consumed 66.9% of its revenue, marking an improvement from the 99.3% consumed in the same period in 2022. The bank forecasted further relief, projecting the ratio might decrease to 62.6% by 2025 if the government maintains its current trajectory of structural reforms.
President Tinubu expressed optimism about Nigeria’s future economic stability, stating that his administration is “on a good path” toward economic recovery, despite the cost-of-living challenges caused by recent fiscal reforms.
He reaffirmed the government’s commitment to address economic exploitation, saying, “We have taken the bull by the horns. We have stopped the scavengers. We will fully put an end to the profiteers and smugglers of our resources.”
The President acknowledged the current high cost of living but emphasized his administration’s dedication to economic retooling. “Yes, the cost of living has risen. I acknowledge that.
We have fulfilled our obligation of paying a new minimum wage across the board…we are navigating through this and working diligently,” Tinubu stated, promising a path to recovery that would secure the well-being of future generations.
The new cabinet members, each representing strategic sectors, took their oaths in two groups, with portfolios including Livestock Development, Housing, Education, and Foreign Affairs, alongside Industry, Trade, and Humanitarian Affairs.
This swearing-in follows a recent reshuffle that saw 10 ministers re-assigned, five discharged, and seven new nominees confirmed by the Senate in a push to realign the cabinet with Nigeria’s current needs.
Tinubu’s resolve, evident in both his economic reforms and strategic cabinet appointments, signals a deliberate approach to rebuilding Nigeria’s economic framework as the country strives for financial stability and sustainable growth.