The International Monetary Fund (IMF) has stated that Nigeria is not earning enough revenue to support its developmental needs.

Nigeria’s Minister of Budget and Economic Planning, Abubakar Bagudu, during the 2024 budget presentation before parliament, admitted that “revenue generation remains the major fiscal constraint to Nigeria’s fiscal viability. However, the government is reviewing current tax and fiscal policies to improve revenue generation.

“The target is to increase the ratio of revenue to GDP from less than 10% currently to 18% within the current term of this administration. Efforts will however focus on improving tax administration and collection efficiency.”

The Director of the IMF’s Communications Department, Julie Kozak, revealed over the weekend that the country’s 9% revenue to Gross Domestic Product ratio was very low and not enough to support the country’s social safety nets and development spending, and protect its vulnerable households.

“As we mentioned in our Article IV Consultation, which was held in February 2023, raising revenue from the very current low revenue to GDP ratio of 9% is essential to create fiscal space for social and development spending,” she said in response to a question about Nigeria during the briefing.

“Nine per cent of GDP is a very low revenue to GDP ratio, and it is not high enough to be able to support strong social safety nets, and development spending, to help protect vulnerable households and also to meet Nigeria’s development needs.”

She added, “The 2024 budget aims to reduce the fiscal deficit while also creating space for these priority spendings, both on the social side and also on the development side.”

After a decade-long process of negotiations and reforms with creditors, Somalia has finally secured a $4.5 billion debt write-off from global lenders as the enhanced Heavily Indebted Poor Countries (HIPC) Initiative has spared the nation from repaying its debt.

The World Bank reports that the country’s debt has significantly decreased from a peak of $5.2 billion to $600 million as a result of the action taken by multilateral and bilateral lenders, including the International Monetary Fund (IMF).

Commercial creditors have contributed $3 billion towards the debt relief, with multilateral creditors contributing $573.1 million, the World Bank’s International Development Association contributing $448.5 million, the IMF contributing $343.2 million, and the African Development Fund contributing $131 million.

Following the Bretton Woods institutions’y boards’ approval process, a historic announcement regarding Somalia’s debt forgiveness is scheduled to take place in Washington DC on December 13.

HIPC completion points were reached by 37 nations, with Somalia following suit after Zimbabwe and Sudan were left behind. Under the leadership of the current president, Hassan Sheikh Mohamud, Somalia began holding HIPC talks ten years ago, and the nation has continued on the reform path despite political obstacles.

Kristina Svensson, the country manager for Somalia at the World Bank, praised Mogadishu for its “remarkable” commitment to reform last week.

“There have been a lot of political challenges within Somalia, but this thing (principles of HIPC), has held it quite high,” she said.

“This is satisfactory for them (Somalia) to achieve debt relief,” said Ms. Svensson. “Both the World Bank and IMF as well as other international partners, have been essential to providing technical assistance to support the achievement of these triggers.”

Over the past few weeks, Somalia has achieved huge milestones in its efforts towards socioeconomic and political liberation. It recently joined regional bloc, East Africa Community (EAC), as it seeks strategic partnerships with neighbours.