Two days after the finance minister, Kemi Adeosun, said the federal government must
move away from debt in funding future budgets, she clarified her statement saying Nigeria has no choice but to continue to borrow in other to implement the Federal Government's Economic Recovery and Growth Plan, ERGP.
Speaking at the quarterly presidential business forum in Abuja, Mrs. Adeosun said Nigeria needs to generate more money to fund its budget. "We need to mobilise additional revenue to fund our budget," she said.
"We have got to get our budget bigger and to
do that we cannot borrow anymore. We simply
have to generate more revenue, we have to
plug the leakages, we have to improve tax collection so that we can manage our borrowing."
However, in a statement signed by the Director of Information, Federal Ministry of Finance, Salisu Dambatta, on Thursday, Mrs. Adeosun said Nigeria will continue to borrow to fund its budget.
"Nigeria will continue to borrow. Nothing has
changed," her spokesperson quoted her as
saying.
"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 N7.44 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," she said.
Mrs. Adeosun said that in addition to borrowing, 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.
"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," she said.
Mrs. Adeosun said that for now however,
increased spending, funded by debt, would act
as a stimulus for growth.
(NAN)
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