The Minister of Finance, Dr. Ngozi Okonjo-Iweala, on Tuesday said that contrary to fears being expressed in some quarters about country’s mounting debts, the economy was not in any way threatened by the development. The Minister, who put the country’s debt to the Goss Domestic Product ratio at 21 percent, noted that the figure was still low when compared to other developed economies such as the United Kingdom (89%); the United States (90%) and Japan (200%).
She said, “Nigeria does not have a debt problem overall, but has to watch its domestic debt. “There is something called debt to GDP ratio. This is what is used in the whole world to measure the state of indebtedness of a country; and in Nigeria, in whichever way you look at it, our debt to GDP ratio is 21%. “This is one of the lowest for a country of our profile worldwide.”
The minister said the Federal Government had put in place an effective debt management strategy, adding that there was no way the situation would get to the point where the government would seek for debt relief as was done in 2004.
Okonjo-Iweala put the nation’s external debt to GDP ratio at just two per cent; while the balance of 19% was for domestic debt. “So, now, we need to keep our debt to GDP ratio very reasonable; the normal standard for a country like Nigeria is around 40 per cent to 60 per cent,” she concluded.