The World Bank has characterized Nigeria's fiscal situation as a revenue shortfall rather than an unsustainable debt burden, pushing back against domestic concerns over the pace of government borrowing.
The lender described the West African nation as moderately indebted, arguing that the primary constraint on economic stability is the narrowness of the federal government's income base.
25 billion loan to support Nigeria's investment and jobs acceleration programme.
This assessment comes as public scrutiny of the country's borrowing costs intensifies, with critics pointing to the rising share of the budget consumed by debt servicing.
By shifting the focus from the stock of debt to the flow of revenue, the World Bank's position implies that fiscal policy should prioritize tax administration reforms and economic diversification.
The argument suggests that without a broader revenue base, even moderate levels of borrowing can strain public finances, while higher debt levels might be manageable if accompanied by stronger fiscal inflows.
The commentary follows the World Bank's recent approval of a $1.25 billion loan to support Nigeria's investment and jobs acceleration programme.