Finance Minister insists Nigeria is not broke; here’s why
Zainab Ahmed, Nigeria’s Minister of Finance, Budget and National Planning, said the country is not broke.
While speaking at the 6th edition of President Muhammadu Buhari’s scorecard presentation organized by the Ministry of Information, the Minister emphasised that the country is in good economic standing.
She added that the country has continued to generate revenue regularly which is allocated to all the tiers of government.
Growth in non-oil revenue: Ahmed stated that Nigeria saw a growth level in non-oil revenue, adding that the country continued to improve oil revenue which had dwindled in the last few years. She said:
- “We continue to generate revenue on a monthly basis and these revenues are distributed at the Federation Account Allocation Committee (FAAC). Again, to continue with the tradition of transparency, we actually disclose how much is distributed monthly to the various tiers of government.
- “She added that Nigeria has witnessed a significant increase in non-oil revenue through oil revenue is underperforming because of criminality.
- “Recently, NNPC has reported that this has been curtailed and we are already beginning to see the pick up in the production volumes which is that more revenues have started to come to the Federation.”
But revenue not enough: Despite the remarkable improvements, Ahmed added that revenue is still not enough to meet government expenditures, hence the need to resort to loans. She, however, note that such borrowings were guided by certain strategies to ensure sustainability.
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- “Our borrowings have been practical. They are sustainable, they are guarded by debt management strategies. There is a debt management board that is chaired by the Vice President, the ministers of Justice, Finance and other ministers as well as the Debt Management Office (DMO). The debt management is being followed religiously and our debt is sustainable,” she explained.
No plans to restructure debt: The minister pointed out that at 33% debt to GDP ratio, Nigeria’s debt is still the lowest when placed beside countries with equal comparatives.
To this end, she noted that there are no plans to restructure the debt, adding that Nigeria does not have to restructure because it has a debt strategy that could be followed closely.
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- “We make provision in our budgets for debt servicing. It is taken as a first-line charge so we have not defaulted on any loan, external or local. So we are comfortable in terms of our ability to pay our debts, so we are not going for any debt relief and we are not going for any debt restructuring,” she said.
Solving revenue challenge: Ahmed, however, pointed out that the country is faced with revenue challenges despite the increase in revenue, referencing the performance of 8% GDP. She said:
- “We are a population of 200 million people, and we have a lot of demands on government, both state and federal, to provide service. We have to keep working to find out how we can incentivize and enhance the business environment so that small business enterprises can thrive. They should be the largest employer of labour and should be the largest contributors to the GDP.”