FG needs to spend more but can’t rely on borrowing, Wale Edun tells senate panel

Wale Edun, minister of finance and coordinating minister for the economy, says the federal government needs to spend more but borrowing to fund its budgets is not sustainable.

Edun spoke on Thursday when he appeared before a senate joint committee on the 2024-2026 medium-term expenditure framework (MTEF) and fiscal strategy paper (FSP) chaired by Sani Musa, senator representing Niger east.

The finance minister said Nigeria’s spending in comparison to gross domestic product (GDP) is one of the lowest in the world.

“Clearly the environment that we have now, internationally as well as nationally, we are in no position to rely on borrowing,” he said.

“We have an existing borrowing profile. Our direction of tariff is to reduce the quantum of borrowing or intercepting deficit financing in the 2024 budget.

“What is left for us to access those funds are expensive so it is the last thing that we must rely on.

“The last thing you can think of is to pile on more debts. Government needs to not just maintain its activity, it needs to spend more.

“If you look at government spending, if you look at the budget as a percentage of GDP, ours is one of the lowest being 10 percent, even Ghana is at 25 percent, rich ones (countries) are at 50 percent.”

Earlier, Musa expressed dismay over leakages of revenue in the economy.

“A lot of funds being generated as revenues by most MDAs are not being remitted as at when due. Some even remit funds a year after they collected the money,” Musa said.

“The office of the accountant-general of the federation should look properly in that direction.

“The current practice of delaying the remittances of revenues by the MDAs had created a room for the misappropriation of those funds.”

The senator added that after their meeting with customs on Wednesday, it was understood that there is a huge shortfall in revenue owing to waivers granted by the government.