Ministry Of Finance Refutes Minister’s Comment On Not Borrowing Funds

The Ministry of Finance has contradicted its Minister, Mrs. Kemi Adeosun’s announcement that Nigeria “cannot borrow anymore” due to the accumulation of the debt

Adeosun had previously disclosed on Monday, July 10, that the Federal Government cannot afford to continually borrow to fund its budget, advising that it should generate funds internally.

“We cannot borrow anymore, we just have to generate funds domestically to fund our budget, and mobilise revenue to fund the necessary budget increase,” Adeosun had said.

However, in a statement delivered on Thursday, July 13, the ministry’s Director of Information, Mr. Salisu Dambatta, made a contradictory assertion.

The statement emphasised that the Federal Government will continually borrow from foreign and domestic financial institutions to fund its activities.

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According to Dambatta, “Following recent reports on comments by the Minister of Finance about Nigeria’s debt strategy and ability to borrow, it is important to clarify the position of the minister and the Federal Government. 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. In 2017, the government is committed to spending N7.44tn, with a projected fiscal deficit of N2.356tn, which will be funded by a combination of domestic and international borrowing.”

The statement also disclosed that “Nigeria’s debt to GDP ratio is low when compared to our contemporaries in Africa and across most of the developed world. We have a 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.”

The statement further emphasised that the government is currently working on diversifying the country’s revenue base which will over time clear Nigerias debt and forestall  Nigeria from depending on debt to fund its budget.

It clearly stated that though the government will continue to borrow, but at a reduced rate.

It stated, “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, we must replace the debt that we are incurring in the short to medium term with strong revenue sources.

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“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 and recruitment of community tax liaison officers 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, though, increased spending, funded by debt, will act as the stimulus we need to grow.”