‘Nothing has changed — so Nigeria will continue to borrow’

Kemi Adeosun, minister of finance, says although the country cannot depend on borrowing to fund its budget, it will continue because nothing has changed.

In a post on her Twitter page on Tuesday, the minister had said Nigeria would have to increase revenue to fund budgets instead of depending on loans.

We need to increase our budget size, but we can't depend on borrowing anymore, so we have to improve revenues and block leakages. #PQBForum

— Kemi Adeosun (@HMKemiAdeosun) July 11, 2017

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But in a statement signed by Salisu Dambatta, director of information, federal ministry of finance, on Thursday, Adeosun was quoted as saying that Nigeria has no choice but to borrow to implement the economic recovery and growth plan (ERGP).

“Nigeria will continue to borrow. Nothing has changed. 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 was quoted as saying.

“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 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.”

In addition to borrowing, Adeosun said the government was working towards having a diversified revenue base to ensure that the country do not continue to overly rely on debt to fund the budget.

“To build a sustainable economy we must replace the debt that we are incurring in the short to medium term, with strong revenue sources,” the statement further read.

“That is why the ministry of finance is 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).

“Also, the recruitment of community tax liaison officers (CTLOS) is 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.”