Ndubuisi Francis in Abuja
Contrary to reports credited to her that Nigeria will no longer borrow to fund its budget and should instead rely on raising money internally, the Minister of Finance, Mrs. Kemi Adeosun, has declared that the country will continue to borrow.
In a statement yesterday, the minister said following recent reports on comments by her about Nigeriaâ€™s debt strategy and the ability to borrow, it was important to clarify her position and that of the federal government.
According to the statement issued by the Director (Information), Ministry of Finance, Mr. Salisu Naâ€™Inna Dambatta, the minister said: â€œNigeria will continue to borrow. Nothing has changed.â€
â€œThe Economic Recovery and Growth Plan (ERGP) provides for an increase in spending over a three-year period, which is reflected in the 2017 budget. In 2017, the government is committed to spending N7.44 trillion, with a projected fiscal deficit of N2.356 trillion, which will be funded by a combination of domestic and international borrowing.
â€œNigeriaâ€™s debt-to-GDP ratio is low when compared to our contemporaries in Africa, and across most of the developed world. We have headroom to borrow and are doing so aggressively in the short to medium term in order to address our infrastructure deficit and to stimulate growth.
â€œAt the same time, it is vital that Nigeria diversifies its revenue base and builds its revenue profile, as is projected in the ERGP, to ensure that we do not continue to overly rely on debt to fund our budget spending over the long term. To build a sustainable economy, we must replace the debt that we are incurring in the short to medium term, with strong revenue sources.
â€œThat is why the Ministry of Finance is focused on expanding our tax base, which we are doing with a range of initiatives which include the Voluntary Asset and Income Declaration Scheme (VAIDS) and recruitment of Community Tax Liaison Officers (CTLOS) to improve tax compliance in the long-term, and we are heavily focused on making government spending more productive and efficient,â€ the statement added.
It pointed out that Nigeria cannot rely on debt indefinitely, stressing: â€œWe must be focused on a future where we can earn enough internal revenue to spend on the projects that will grow our economy. In the short term, though, increased spending, funded by debt, will act as the stimulus we need to grow.â€