The Minister of Finance, Zainab Ahmed, has disclosed plans of the Federal Government to borrow in order to plug the deficit in the 2022 budget.
She shared this at a press conference after the Federal Executive Council (FEC) in Abuja, highlighting the benefits of borrowing, pointing to the precedence set by past administrations.
She said that “Government has been borrowing before this administration and continues to borrow and it is important that we borrow to provide developmental projects in the form of roads, rails, bridges, power and water for sustainable development in this country.
“If we just depend on the revenues that we get, even though our revenues have increased, the operational expenditure of government, including salaries and other overheads, is barely covered or swallowed up by the revenue.”
She maintained that Nigeria’s current GDP to debt ratio remained at 23 percent, the lowest in the region.
The minister said, “Nigeria’s borrowing, has been of great concern and has elicited a lot of discussions. But if you look at the total size of the borrowing, it is still within healthy and sustainable limits.
“As of July 2021, the total borrowing is 23% of GDP. When you compare our borrowing to other countries, we’re the lowest within the region, lowest compared to Egypt, South Africa, Brazil, Mexico, the very lowest, and Angola.
“We do have a problem with revenue. Our revenues have been increasing. We just reported to Council that our revenues from non-oil have performed, as of July, at the rate of 111%, which means outperforming the prorated budget.”
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President Muhammadu Buhari transmitted a request for loan requests of N4 billion and 710 million euros to the National Assembly, pushing the country’s debt to N35.465 trillion, the Debt Management Office (DMO) said.
It noted that the country’s external debt stood at N13.711 trillion, representing 38.66 percent of the total debt, while local debt stood at N21.754 trillion or 61.34 percent.
The department also said that Nigeria had spent a total of $1.302 billion on debt servicing in the first six months of 2021.
Breaking it down, the DMO said that Nigeria spent $704.44 million more than was spent in the second quarter of 2021.
Experts have pushed for an introspection, utilising its abundant resources – including its ballooning youth population – to grow its various economic sectors to enable it to cut back on borrowings.
