Addressing the issue of the country’s sustained borrowing, the Minister of Finance, Budget and National Planning, Zainab Ahmed, has said that the borrowings are a “necessary investment”.
Ahmed said this during a chat with journalists in Abuja while speaking on the country’s Gross Domestic Product’s (GDP) growth.
Recently, the Nigeria Bureau of Statistics released a report that showed that the country’s GDP had risen by 5.01 percent in the second quarter of 2021.
The minister said that the government’s borrowing habit was aimed at “sustainability” and that it was borrowing “sensibly”.
She noted that the borrowed funds were channeled to critical sectors like road, rails, power, and water needed to boost productivity in Nigeria.
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She added that despite the borrowing, Nigeria’s borrowing level stood at 23 percent, lower than its peers that had borrowing levels between 50 and 70 percent.
Ahmed said, “We are borrowing with a very close consideration to the sustainability of the borrowing. The borrowing level for Nigeria today is still 23 percent of the GDP.
“I have said it several times that the problem we have in Nigeria is that of revenue and when you look at the country that are within the peer group with Nigeria, there are some that had 50 percent growth that are now at about 70 percent growth.
“We are at 23 despite the escalated borrowing we had to deal with in 2020 also in 2021 to get a good grip on the economic situation that was occasioned by COVID-19 pandemic and in our case due to the crash in crude oil price.
“We are borrowing sensibly. We are also borrowing to invest in critical infrastructure like power, water, roads and rails which are investments that are required to enhance business productivity in the country today.
“These businesses will grow, they will not only pay taxes, they will also employ people. If we don’t do this, we will regress even from where we are today. It is a necessary investment so we are borrowing responsibly.
“We are making sure what we are borrowing is applying to major infrastructure that will return revenue in the near future.”
