- Nigeria needs to grow faster, says Okonjo-Iweala FG woos Qatar’s Sovereign Wealth Fund
Ndubuisi Francis in Abuja and Nume Ekeghe in Lagos
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has reaffirmed her position that Nigeria does not have a debt problem but the challenge of under-performing revenues, which makes debt service obligation a struggle for the country.
In spite of Nigeria’s burgeoning debt profile, which currently stands at over N26.2 trillion, Ahmed has consistently insisted that the nation faces no debt problem.
This is coming as a former Minister of Finance and Chairman, Global Alliance for Vaccines and Immunisation (GAVI), Dr. Ngozi Okonjo-Iweala, yesterday stressed the need for policy makers in Nigeria to design policies that would fast track economic growth in the country.
Zainab, who spoke from Davos, Switzerland in an interview with Arise News at the ongoing conferences of the World Economic Forum (WEF), insisted that at about 19 per cent of its Gross Domestic Product (GDP), Nigeria has no debt crisis, but that of revenue.
Arise News is the sister broadcast arm of THISDAY Newspapers.
Lending credence to her position, Ahmed said two Bretton Woods institutions— the World Bank and the International Monetary Fund (IMF) recommended that for economies the size of Nigeria’s, the comfortable threshold for borrowing should be 50 per cent of GDP, adding that the country is just at about 19 per cent.
Prodded on whether or not she still maintains her stance on the nation’s debt, the minister said: “Nigeria has a revenue, not debt problem. Our debt today is still just about 19 per cent of our GDP. The World Bank and the IMF recommend that an economy that is the size of Nigeria could have a borrowing that is up to 50 per cent of its GDP, but we are only at 19 per cent.
“Why I call it a revenue problem is because our revenues are under-performing and therefore our debt service obligation is a struggle for us . To address that, we are working to increase revenue; we are also working to reduce our cost of borrowing by refinancing our old domestic loans that are quite expensive in terms of rate and also expanding the tenor so that the debt payment obligation becomes easier.”
She also addressed the issue of failure to meet revenue targets in the past few years, noting that the 2020 fiscal year provided positive hope to change the narrative.
According to her, all the key ministries, departments and agencies (MDAs) are working towards increasing every revenue aspect that they handle.
Meanwhile, Okonjo-Iweala, yesterday stressed the need for policy makers in Nigeria to design policies that would fast track economic growth in the country.
She also advised the federal government to take step to raise the country’s revenue generating capacity, adding that the government must always take into consideration the country’s revenue to GDP so as to ensure that it is able to service the rising debt level.
Okonjo-Iweala said this yesterday, in an interview with Arise News at the ongoing World Economic Forum 2020 in Davos, Switzerland.
Speaking on the state of the economy, she said: “I think we need to step up as a continent and our country Nigeria. This is because Nigeria, South Africa and Angola are more than 50 percent of sub-Saharan Africa GDP and therefore they bear a very big responsibility that they have to grow and perform themselves, but to also carry along the rest of continent.”
“But luckily, we have some good examples in the continent. There are eight countries that are among the fastest growing in the world; Ethiopia, Senegal, Ghana, Côte d’Ivoire, Rwanda, Tanzania just to name a few. It shows that if we do the right policies and push on some reforms, we can indeed grow.”
Okonjo -Iweala added: “I think Nigeria has the potential. It is not only about population control, it is about exploiting the potential that we have in the many sectors in the economy – and then, trying to grow faster. No matter what we do, we have to grow. If we do not grow at a faster pace, we would continue to accumulate larger numbers of poor people.”
“Right now, we are experiencing negative per capita growth and we need to turn that around and have positive growth. We need to work harder to make sure we do it. Because it is good for our young people and it is good for the whole continent.”