President Muhammadu Buhari’s government says its constant reliance on loans is within healthy limits amid plans to borrow to finance the N6.258 trillion deficit in the proposed 2022 budget, insisting it will keep borrowing because it is in Nigerians’ interest.
“Government has been borrowing before this administration and continues to borrow, and it is important that we borrow to provide developmental projects in the form of roads, rails, bridges, power, and water for sustainable development in this country,” said finance minister Zainab Ahmed in a press conference after the council meeting in Abuja on Wednesday.
Ms Ahmed further noted that “if we just depend on the revenues that we get, even though our revenues have increased,” the operational expenditure of the government, including salaries and other overheads, “is barely covered or swallowed up by the revenue.”
Her comments came just as the Federal Executive Council (FEC) approved N16.39 trillion for the 2022 Appropriation.
Mrs Ahmed admitted that the borrowings have been of great concern but insisted that Mr Buhari’s appetite for borrowing is healthy.
The country’s major opposition party, PDP, former President Olusegun Obasanjo, and other prominent figures have censured Mr Buhari’s penchant for taking loans to run the country.
But Ms Ahmed justified the borrowings, saying it had been in existence before the regime and that the total borrowing was 23 per cent of the GDP as of July.
The minister argued that Nigeria’s borrowing was the lowest compared to other countries.
“As of July 2021, the total borrowing is 23 per cent of GDP. When you compare our borrowing to other countries, we’re the lowest within the region, lowest compared to Egypt, South Africa, Brazil, Mexico, the very lowest, and Angola,” she argued.
However, she admitted, “We do have a problem with revenue. Our revenues have been increasing. We just reported to the council that our revenues from non-oil have performed, as of July, at the rate of 111 per cent, which means outperforming the prorated budget.”
President Buhari had previously vowed to go to jail to keep borrowing. Last month, the president sent a fresh round of requests to the National Assembly, seeking permission to borrow another $4 billion loan.
A report by the Nigerian Domestic and Foreign Debt Report, published this year by the National Bureau of Statistics (NBS), estimated that the country’s total public debt as of September 2020 was N32.2 trillion ($84.57 billion).