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Economy on path of consistent growth, says Finance Minster 

The economy is on the path of consistent growth with 3.5 per cent growth expected this year, Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed announced.

Speaking on the sidelines of the 2023 World Economic Forum (WEF) held in Davos, Switzerland, she said this year’s growth will be driven by non-oil sector and oil sector, where revenue is gradually picking up on the back of increased oil production.

Ahmed said production will surpass the projected 1.6 million barrels of oil per day and support the government’s drive for more revenue.

“Production has picked up and it looks good to continue to reach the numbers that we have put in the budget. Our target is 1.6 million barrels per day and we can comfortably achieve that,” she said.

“We are doing an average of 1.25 million bpd to 1.3 million bpd, so we should be able to reach that and hopefully we surpass that as well with the measures that have been put in place.”

On the government’s achievements, she said: ” We’ve done a lot in terms of taking care of the people, increasing our infrastructure stock, helping the economy to grow on a consistent basis, despite two recessions. We pulled out a recession quickly and set the country back on the path of have also done a lot in terms of being able to provide for our people at the time that people need help the most.”

According to the minister, Nigeria also plans to bring down its debt service-to-revenue ratio to 60 per cent from current 80 per cent.

The expected drop on debt-service cost will also be achieved with expected rise in revenue.

Ahmed said Nigeria plans to cut its revenue spending on debt servicing to 60 per cent in 2023, adding that the current ratio is not sustainable.

“Well, 80 per cent is not sustainable and our plan is coming down to 60 per cent in 2023 and how are we doing that? We are doing that by increasing revenues and by significantly reducing costs to enable us cope,” she stated.

“There are some costs that we can pull back on, though not in the economy, but there are some costs that we must sustain such as provisions for education and health as well as infrastructure.”

” We are sustainable in our debt trajectory. Our plan is to ensure we’re able to consistently service our debts. And by the way, we’re also exiting a subsidy, which is a huge cost , and part of the contributors to where we are in terms of the debt stock. So, once  we pull the first subsidy, our production of crude oil increases and then we sustain the improvements we have put in place in terms of non-oil revenue, then we should be able to come down to 60 per cent debt-service cost,” she stated.

Asked if a lower debt service-to-revenue ratio will open up Nigeria’s bond markets, Ahmed said, “no, not 2023”.

“If we are able to get back to the rates of early 2021, then we can consider going back to the bonds market, but then we are consistently monitoring the bond market. We are monitoring the performance of our bonds. So, when it gets to that comfortable level, we will explore it,” she stated.

She said 2023 is an election and census year, and that could raise liquidity level.

Ahmed said the International Monetary Fund (IMF) Special Drawing Right -loan was of great help to the economy.

She said that negotiations for more SDRs are ongoing by countries, including Nigeria.

She said the Investors and Exporters Forex window has remained the officially recognized exchange rate window and the the country relies on.
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