THE International Monetary Fund (IMF) has expressed concern over rising public debt in Nigeria and other African countries, calling for fiscal measures to arrest the trend.
IMF’s Director for African Region, Mr Abebe Selassie, stated this at the weekend in Washington DC, United States, during a press briefing at the annual meetings of the World Bank/IMF.
Selassie noted that although virtually all African countries were hugely indebted, public debt was more prevalent in oil-exporting countries in Africa.
He attributed “fiscal deficits, growing interest bills and valuation effects associated with exchange rate depreciation,” as factors responsible for the growing debt.
According to him, conducive external financing environment, which has eased access and cost of borrowed funds, has encouraged increased borrowing and shot up Africa’s debt profile.
“But this decline in borrowing costs has improved access to financing, allowing several countries to return to the Euro bond market in the first half of this year,” he said.
While he acknowledged the fiscal adjustment plans put in place by African countries, he stressed that adherence to the plans was more important.
“Most sub-Saharan countries are planning fiscal adjustment in the coming years. So, the key message in passing will be that countries need to stick to the adjustment plans,” he stated.
