CBN Warns of Economic Crisis as Fiscal Balance of W/African Nations Deteriorates
The Director of the Monetary Policy Department of the Central Bank of Nigeria (CBN), Dr. Mahmud Hassan, said the global economic crisis has affected the fiscal balance of member countries of the West African Institute of Financial Management and economy (WAIFEM).
He made this known while delivering a keynote address to participants at the WAIFEM Regional Course on Medium Term Budget Frameworks (MTBFs) and Monitoring in Abuja.
Mahmud noted that the last two years of unrest had impacted all policy areas, including politics. According to him: “Our WAIFEM member countries have experienced a significant deterioration in their fiscal balance and a spectacular growth in their public debt, which has exposed them to the risk of debt distress”.
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Represented by a deputy director of the department, Mr. Yusuf Bulus, he lamented that the desired growth required by member countries was not on the horizon.
He says: “For most of our member countries, the prospect of growth that would contribute to a substantial reduction in the debt-to-GDP ratio and the restoration of balanced budgets is not immediately on the horizon.
He explained to course participants that fiscal deficits and public debt can have direct and negative consequences for fiscal sustainability, calling them (fiscal deficits and public debt) key factors to consider when assessing the credibility of macroeconomic policies.
Furthermore, WAIFEM Director General Dr. Baba Yusuf Musa said the course was organized against the backdrop of the immense macroeconomic and fiscal challenges facing member countries.
Represented by a director, Aliyu Yakubu, he said: “Economic shocks resulting from the COVID-19 pandemic, ongoing regional conflicts and the resurgence of domestic health and security issues have complicated budget management by disrupting the prioritization budget, by widening the budget deficits and increasing the public debt of our countries.
He said those difficulties don’t seem to be going away anytime soon. Although there is enormous pressure to continually increase discretionary and non-discretionary spending, revenue growth is not keeping up with even the moderate expected growth rates.