“Nigeria will continue to borrow. Nothing has changed,” the minister said in a statement to debunk reports that the Federal Government had stopped borrowing.
She said “the Economic Recovery and Growth Plan provides for an increase in spending over a three-year period, which is reflected in the 2017 budget”.
She added that “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.”
Nigeria’s debt to GDP ratio, the finance ministry noted, “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.”
However, the minister added that “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, Mrs. Adeosun said Nigeria “must replace the debt that we are incurring in the short to medium term, with strong revenue sources”.
The Ministry of Finance, she said, remains “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.
“Nigeria cannot rely on debt indefinitely. We 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, through increased spending, funded by debt, will act as the stimulus we need to grow.”
Also yesterday, House of Representatives Speaker Yakubu Dogara queried the non-disclosure of interests accruing to Nigeria’s foreign reserve accounts by the Central Bank of Nigeria (CBN).Speaking when a delegation from the Fiscal Responsibility Commission (FRC) visited him in Abuja, he said that agencies, such as the commission, should be in custody of such figures for dissemination to the public when necessary.
The House on Dec.15, 2015 passed a resolution calling on the CBN to declare interests accruing on the foreign reserves accounts of the federation.
“We earn interest on foreign reserves, like Botswana. They don’t have oil but the interest on reserve is their second highest revenue source after natural resources.
“You will see it as a budget item, interest earned from foreign reserves.
“In Nigeria, we have been asking the question, `are we earning or are we just running charity with it or just leave people to manage it?
“Are we capitalising the interest and what is the interest? Nobody has ever told us,’’ Dogara said.
He said that CBN was the custodian of foreign reserves.
But, he pointed out that if they are not forthcoming with regards to what had been happening with the interest earned on foreign reserves, there should be an agency of government to handle it.
The speaker also sought to know why the ceiling on borrowing as stated in the FRC Act was not adhered to, adding: “Do we continue borrowing until we have borrowed billions?
“The Fiscal Responsibility Act speaks to those things; so, why is it that it is not being done?’’ he asked.
Dogara spoke of an urgent need for the government to properly fund the commission to enable it deliver on its mandate and strengthen its powers.
According to Dogara, the commission has the capacity to reduce corruption by over 80 per cent.
He said the reason for the establishment of FRC was for Nigeria to have an agency that would ensure that it had efficient allocation of resources.
The approach adopted by the government to fight corruption through the EFCC to punish offenders after the crime has been committed should be redirected to checking the root of the problem, He addded.
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