AFRICA’S RISING DEBT: IMPLICATIONS FOR DEVELOPMENT FINANCE

Abstract

Managing revenue volatility and achieving fiscal independence has always been challenging for successive governments in Nigeria. Rapidly changing fiscal environment at the sub-national level. Supply Side 2014 oil price collapse Revenue from oil declining by over 40 percent: States FAAC Allocation – N3.1 trillion (2013), N2.7 trillion (2014) - N2 trillion (2015) – N1.6 trillion (2016). Mild recovery in 2017 (N2.1 trillion) Impact Shocks in public spending and fiscal consolidation with budgets and expenditure plans barely adjusting Servicing basic obligations such as salaries and pensions became challenging Limited funds for infrastructure financing States became major debtors - debt stock and debt servicing rising