The Nigeria Employers’ Consultative Association (NECA) has raised concerns that Nigeria’s escalating debt situation could deter serious investors from bringing capital into the country.
NECA President, Ifeanyi Okoye, who stated this over the weekend, noted that the floating of the naira is a critical factor that has driven several multinational manufacturing companies to exit Nigeria.
“The country is rapidly approaching a debt overhang, and no serious investor will inject capital into a debt-ridden economy,” Okoye stated.
He emphasized the need for the government to curb the cost of governance to reduce borrowing, particularly if revenue improvements are not feasible.
Okoye pointed out that the 2024 supplementary budget would likely result in increased borrowing by the federal government, both from international lenders and local sources, which he warned would have adverse effects on both foreign and domestic investments.
He added that Nigeria’s debt-to-GDP ratio currently stands at 52.9%, surpassing the 50% benchmark set by the World Bank and IMF for developing countries.
Additionally, the debt-service-to-revenue ratio reached 73.5% in 2023 and may have risen further, signaling serious financial risks for the country.