Business

Debt Servicing May Take All Of Nigeria’s Revenue By 2026, IMF Warns

Published

3 years ago

June 1, 2022

The Nigerian government may spend nearly 100 per cent of its revenue on debt servicing by 2026, the International Monetary Fund (IMF) has warned.

The Bretton Wood institution raised concerns over Nigeria’s fiscal conditions, adding the nation spends 89 per cent of its revenue on debt.

The IMF’s Resident Representative for Nigeria, Ari Aisen, made this known on Monday in Abuja while presenting the fund’s latest Sub-Saharan Africa Regional Economic Outlook report.

IMF also warned that with fuel subsidy payments averaging N500 billion monthly, total expenditure on subsidy could hit a record N6 trillion by the end of the year.

“I think the biggest critical aspect for Nigeria is that we have done a macro-fiscal stress test, and what you observe is the interest payments as a share of revenue and as you see us in terms of the baseline from the federal government of Nigeria, the revenue, almost 100 percent, is projected by 2026 to be taken by debt service,” the IMF official said.

“So, the fiscal space or the amount of revenues that will be needed, and this, without considering any shock, is that most of the revenues of the federal government are now in fact 89 percent and it will continue, if nothing is done, to be taken by debt service.”

The IMF said that it is a reflection of the low revenue of the country, adding that it needs to mobilise more revenue to be able to have macroeconomic stability.

“It has become an existential issue for Nigeria,” Mr Aisen warned.

Subsidy
The IMF official lamented that as an oil exporter, Nigeria is unable to take advantage of the current global high oil prices to build reserves. The nation is equally confronted by low earnings due to the subsidy on petroleum products, he said.

Earlier in April, the Nigerian Senate approved N4 trillion for petrol subsidy in 2022, following two separate requests by the Nigerian president to the National Assembly. The government had shelved a planned move to suspend the subsidy payment a few weeks earlier.

In the midst of the uncertainties, the World Bank Group urged Nigeria to rethink its fuel subsidy regime and multiple exchange rates policy. Speaking during a media briefing at the World Bank/International Monetary Fund Spring Meetings in Washington DC, the president of the World Bank Group, David Malpass, said that resources being expended on subsidy could be channeled to other sectors of the economy to accelerate growth.

“One is that they are expensive because they go to everyone and they are often used by people with upper incomes than by people with lower incomes so they are not targeted,” he said.

“So, we encourage that when there is need for subsidy, either food or for fuel, that it should be carefully targeted at those most in need of it. And so, we have encouraged Nigeria to rethink its subsidy effort.”

In its intervention Monday, the IMF official reiterated the World Bank’s warning, adding that subsidy payments could worsen the nation’s fiscal challenges due to poor earnings from oil.

Speaking on the economic outlook for the continent, the IMF official advised governments across the region to reduce debt vulnerabilities, balance inflation and growth, and manage foreign exchange rate pressures.

“Unrivalled potential for renewable energy and an abundance of minerals, a successful transition offers opportunities for diversification and job creation; ensuring the green transition is also a just transition,” he said.

Business

CBN Directs Nigerian Banks To Withdraw Misleading Advertisement

Published

15 hours ago

November 28, 2025

Editor

The Central Bank of Nigeria (CBN) has directed Nigerian banks, payment service banks and other financial institutions to immediately withdraw all advertisements that violate consumer-protection rules.

The directive, issued in a circular dated Thursday and signed by Olubunmi Ayodele-Oni, director of the CBN’s compliance department, followed a review of marketing practices in the financial sector.

The apex bank said the assessment revealed inconsistencies in how institutions apply disclosure, transparency and fair-marketing requirements.

The CBN ordered the removal of all non-compliant adverts and warned that future promotional materials must be factual, balanced and transparent.

It banned misleading claims, exaggerated benefits, incomplete information, unaudited financial results and comparative language that could de-market competitors.
The regulator of Nigeria’s financial sector also prohibited chance-based promotional inducements such as lotteries, prize draws and lucky dips.

Accordingly, institutions submitting adverts for prior notification must now include campaign timelines, creative materials, target audience details and written confirmation of internal legal and compliance clearance, along with proof that the underlying product has CBN approval.

The bank clarified that such notifications are only for monitoring and do not amount to approval.
All affected institutions must file a compliance attestation within 30 days, signed by the chief executive and compliance leads.

The CBN added that beginning January 2026, it will conduct a follow-up review and apply sanctions for violations under BOFIA 2020 and the Consumer Protection Regulations.

Business

Fourteen Nigerian Banks Yet To Meet CBN’s Recapitalisation Ahead Of Deadline

Published

1 day ago

November 27, 2025

Editor

No fewer than 14 Nigerian commercial banks are yet to meet the Central Bank of Nigeria’s recapitalisation requirement as the 31st March 2026 deadline inches closer.

This follows CBN Governor, Olayemi Cardoso’s announcement on Tuesday that sixteen Nigerian banks have met their recapitalisation requirement ahead of the apex bank’s March 2026 deadline.

DAILY POST reports that Cardoso disclosed this in a statement after the bank’s 303rd Monetary Policy Committee in Abuja.

According to Cardoso, the development indicates that there is financial soundness in the country’s financial banking system.

MPC had been urged by banks to ensure a successful implementation of the recapitalisation process.

“The committee noted with satisfaction the sustained resilience of the banking system, with most financial soundness indicators remaining within regulatory thresholds,” Cardoso said.

“Acknowledged the substantial progress in the ongoing recapitalisation programme, with 16 banks achieving full compliance with the revised capital requirements.

“The committee thus urged the Bank to ensure a successful implementation and conclusion of the programme, among other domestic developments,” Cardoso said.

This means that two additional Nigerian banks have been added to the list of banks which have complied with the apex bank recapitalisation requirement in the last two months.

Recall that Cardoso, in the 302nd MPC meeting, announced that only fourteen banks have met the recapitalisation requirement.

CBN records as of 2024 showed that the country has thirteen commercial banks, five merchant banks and seven financial holdings companies.

Earlier, a report emerged that Access Bank, Zenith Bank, GTBank, Wema Bank, Jaiz Bank, Stanbic IBTC, and others have already met CBN’s recapitalisation requirement.

CBN in March directed commercial banks with international authorisation to increase their capital base to N500 billion, while those with national licences must raise to N200 billion.

Business

CBN Retains Interest Rate At 27%

Published

3 days ago

November 25, 2025

Editor

The Monetary Policy Committee of the Central Bank of Nigeria has voted to retain the benchmark interest rate at 27 per cent.

CBN Governor, Olayemi Cardoso, announced the decision on Tuesday following the apex bank’s 303rd MPC meeting in Abuja.

Cardoso stated that the committee also resolved to keep all other monetary policy indicators unchanged.

He noted that the Cash Reserve Ratio (CRR) remains at 45 per cent for commercial banks and 16 per cent for merchant banks, while the 75 per cent CRR on non-TSA public sector deposits was equally maintained.

Cardoso added that the Liquidity Ratio was retained at 30 per cent, and the Standing Facilities Corridor was adjusted to +50/-450 basis points around the Monetary Policy Rate.

The decision comes as Nigeria records its seventh consecutive month of declining inflation, which eased to 16.05 per cent in September 2025.