The Minister of Finance, Budget & Planning, Mrs. Zainab Ahmed has disclosed that the nation necessarily needs to continue borrowing from external countries even in the face of the hike in the nation’s debt profile.
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This was disclosed during the webinar organized by the Nigerian Economic Summit Group, Fiscal Policy Roundtable & Tax Investment & Competitiveness Policy Commission, where the Honourable Minister was represented by Mrs. Sarah Alade, the Special Adviser to the President on Finance & Economy.
According to the Minister, the Coronavirus pandemic and the global slide in the price of oil have made it difficult for Nigeria, and in that light, it was absolutely necessary to borrow.
Besides, it was noted that before the outbreak of the pandemic, Nigeria had already started grappling with low revenue and rising debt profile.
“We’ve had to grapple with low revenue, even before the pandemic. We had high debt, weak infrastructure base, low human capital and low revenue that is largely dependent on the foreign exchange earned from oil. So, there are many things we have loved to do that we cannot do.
“Due to the global economic slowdown and the revenue issues, what we are expecting is a GDP that would contract, in the best case scenario, by about 4.4 per cent and in the worst case scenario, it could be about eight per cent or more.” She said.
Furthermore, it was disclosed that Nigerians risk losing about 21 million jobs as a result of the pandemic. Hence, there is a need to put things in place in order to ensure rise in revenue.
“We are in a very difficult situation but we are trying to manage that because if nothing is done, up to about 21 million jobs could also be affected by the impact of the pandemic. So, with all these statistics, we cannot overemphasise the importance of raising revenue.”
In addition, the Minister rolled out efforts to sustain the economy in the face of the pandemic, in a bid to cushion the adverse effect it has occasioned .
“We also have the establishment of an N86bn intervention fund for health infrastructure; conversion of World Bank Regional disease surveillance system enhancement programme to support COVID-19 intervention in the states; accelerating infrastructural development; preparation of a Fiscal Stimulus Bill to provide legislative backing for the fiscal stimulus packages that we have; deregulation of the price of refined petroleum products – we know how important that is, given the amount of money that we spent in that area.
“We also have the adoption of financing plan for the power sector recovery programme; incentivising the use of up to N2tn of pension funds for roads and housing development, supporting and encouraging states to achieve state fiscal transparency and accountability, sustainability and other World Bank programme actions in order to access external support and we are collaborating with state governments on affordable mass housing.”
In the light of the above plans, the Minister said it would be inevitable to successfully execute them without beseeching for foreign loans.
“To achieve all these, we will have to keep mobilising external funding and seek debt relief. We continue to engage with the multilateral and donor agencies to access additional funding for crisis response, we seek moratorium from official partners for some of the loans that we have and support arrangement to secure commercial debt relief.” She said.
However, it was stated that had the revenue performed wonderfully well, there might be no need to secure foreign debt.
“If the revenue had performed, then we probably will not be seeking this much support from external sources, we know we cannot but keep working at generating more revenue so that the economy can be better for it.”
Meanwhile, at the webinar, the other panelists were Dr. Kayode Fayemi, Chairman Nigeria Governors’ Forum & Ekiti State Governor; IMF’s Senior Resident Representative for Nigeria, Jesmin Rahman; Muhammad Nami, Chairman, FIRS/JTB and Mr. Paulin Basinga, Country Director, Bill & Melinga Gates Foundation.
TheNigeriaLawyer recalls that there have been series of concerns from several quarters on the spate of the rising profile of the country’s debt. Particularly, Senator Muhammad Enagi, Vice Chairman, Senate Committee on Local & Foreign Debts disclosed that the debt Nigeria incurred has risen to about 33 trillion naira after the approval of the Senate for the Buhari led administration to get another $22.7 billion foreign loan.
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