The World Bank has said Nigeria’s biggest fiscal challenge is weak revenue mobilisation rather than excessive public debt, urging the Federal Government to strengthen domestic revenue generation to support sustainable economic growth and improve its ability to finance development.
Speaking during an interview on Channels Television on Friday, the World Bank Country Director for Nigeria, Mathew Verghis, said Nigeria’s debt level remains moderate by international standards and is significantly different from countries facing debt distress.
“From our assessment, Nigeria doesn’t have a high indebtedness problem; it has a low revenue problem,” Verghis said.
He explained that Nigeria’s debt-to-GDP ratio is lower than that of many comparable economies, arguing that the country’s fiscal sustainability depends more on expanding government revenues than on reducing borrowing.
“When we looked at the numbers, Nigeria is a moderately indebted country, meaning it has less debt relative to its economy than most of its neighbours and many other countries,” he said, adding that Nigeria’s situation differs from countries such as Ghana, which has undergone debt restructuring.
Verghis defended government borrowing as a legitimate tool for financing long-term investments, noting that countries often borrow to fund infrastructure and other projects that stimulate economic growth and improve living standards.
He cited Nigeria’s efforts to expand electricity access as an example, saying significant upfront financing is required to connect millions of households to the national grid, with the expectation that improved economic productivity would strengthen the country’s capacity to repay its loans.
Despite describing Nigeria’s debt profile as manageable, the World Bank official warned that persistently low government revenues remain a major concern.
“Nigeria’s debt is not particularly high, and in fact, it’s quite moderate by international standards. Its revenues are very low by international standards, and unless those revenues are raised, it will not be able to pay back debt,” he said.
According to Verghis, improving tax administration, broadening the revenue base and increasing non-oil revenue would provide the government with greater fiscal space to invest in infrastructure, healthcare, education and other sectors critical to long-term economic development and poverty reduction.
The remarks come as the World Bank implements its new six-year Country Partnership Framework (2026–2032) for Nigeria, which prioritises job creation, infrastructure development, improved human capital and greater private sector participation as key drivers of inclusive growth.
