The World Bank has moved to ease growing public anxiety over Nigeria’s borrowing habits, clarifying that the country’s fiscal challenge is not excessive debt but persistently low revenue generation.

Amid widespread concern among Nigerians about the Federal Government’s rising debt profile, the World Bank described Nigeria as a “moderately indebted country” and stressed that West Africa’s most populous nation faces a revenue problem rather than a debt crisis.

Mathew Verghis, the World Bank’s Country Director for Nigeria, made the remarks during an interview with Channels Television on Friday. He explained that Nigeria borrows for the same fundamental reasons as other nations — to finance investments and meet critical economic needs.

Nigeria’s Debt Profile Compared to Peers

According to Verghis, Nigeria’s debt remains moderate when measured against the size of its economy and is lower than that of many comparable countries. He cautioned against drawing unfavorable comparisons with nations facing more severe financial distress.

“When we looked at the numbers, Nigeria is a moderately indebted country, meaning it has less debt relative to its economy than most of its neighbours and many other countries,” Verghis said. “Nigeria is in a very different situation than Ghana, for example, which is going through a debt restructuring”.

Borrowing as a Development Tool

The World Bank official framed borrowing as a normal and necessary part of economic development, arguing that governments often take loans to fund projects whose benefits unfold over time.

“Nigeria borrows for the same reasons that all countries borrow. If you want to get results, if you want to deliver results to people, then the money that you have on an annual basis is not enough,” Verghis said. “So you borrow, you get results, and that will improve your ability to pay back”.

He cited the energy sector as a prime example, noting that Nigeria requires substantial upfront financing to expand electricity access to approximately 32 million citizens. “To be able to connect, to give energy to 32 million Nigerians, Nigeria needs to borrow money now,” he said. “But that money, with that increased access to energy, Nigeria will become a wealthier country, and it’ll be then possible to pay back”.

The Real Risk: Low Revenue

Verghis warned that Nigeria’s weak revenue base poses a greater threat to public finances than its debt burden. He stressed that increasing government income should be the country’s immediate priority.

“Nigeria’s debt is not particularly high, and in fact, it’s quite moderate by international standards,” the country director said. “Its revenues are very low by international standards, and unless those revenues are raised, then it will not be able to pay back debt”.

He added that stronger revenue collection would equip the government with more resources to invest in infrastructure, education, healthcare, and other sectors that drive economic growth, create jobs, and reduce poverty.

A Shift in Focus

The World Bank’s comments come shortly after the institution unveiled its new six-year Country Partnership Framework for Nigeria, which prioritises job creation through investments in infrastructure, healthcare, agriculture, and digital connectivity. The message is clear: Nigeria’s path to fiscal stability lies not in curtailing borrowing but in dramatically expanding its revenue base to match its development ambitions.