Nigeria at low risk of debt distress —IMF

The International Monetary Fund has said Nigeria is at low risk of debt distress with the country’s Gross Domestic Product expected to rise by 7.4 per cent in 2014.

This was contained in the IMF’s Regional Economic Outlook for sub-Sahara Africa, which was published on Thursday.

The report, which stated that softening and increasingly volatile economic conditions were expected to have only a moderate downward impact on the region in the next two years, predicted a growth rate of six per cent for sub-Sahara Africa.

Commenting on the report entitled, ‘Sub-Sahara Africa: Keeping the pace,’ the Director, African Department, IMF, Antoinette Sayeh, said, “Based on the joint World Bank and IMF debt sustainability analysis, Nigeria remains at low risk of debt distress. The country’s debt outlook remains robust in the baseline scenario that we have in the regional economic outlook.

“We’ve done some stress scenarios to see what happens under certain circumstances, and those scenarios show that without significant compensating policy measures, prolonged negative oil price shock or a permanent real GDP growth shock could undermine the progress that has been made in achieving macro-economic and debt sustainability.”

She added that given Nigeria’s strong starting position, it was important that steps were taken to avoid debt sustainability problems that might arise from such shocks.

The report, however, predicted that Foreign Direct Investment into Nigeria in 2013/2014 would remain at the same levels.

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