Nigeria Can No Longer Rely on Borrowing to Fund Budgets, Says Finance Minister
WALE EDUN
• Senate complains of delay in remittance of generate revenues
By Our Reporter
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, on Thursday told the National Assembly that Nigeria can no longer rely on external loans to fund national budgets.
Edun who appeared before the joint Senate Committee scrutinising the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper, said the country has to do everything to generate adequate revenues to be able to reduce deficit budget financing.
He also said the country needs to spend more money on infrastructure that can generate revenues.
He also disclosed that foreign countries have increase the interest rates lending as a measure of checking inflation for the good of their own economies.
Edun told the Senate, “Clearly the environment that we have now, internationally as well as nationally we are in no position to rely on borrowing.
“We have an existing borrowing profile. Our direction of tariff is to reduce the quantum of borrowing or intercepting deficit financing in the 2024 budget.
“Simply put, internationally there is a focus among rich countries on bringing down the inflation rate to stabilise the economies and give them opportunity for investment growth.
“They are in the process, sacrificing that immediate goal for compacting their economies, or at least contracting the money supplies and pushing up the interest rates and of course high interest rates and investments don’t go together.
“What is left for us to access those funds are expensive so it is the last thing that we must rely on.
“The last thing you can think of is to pile up more debts. Government needs to not just maintain its activity, it needs to spend more.
“If you look at government spending, if you look at the budget as a percentage of GDP, ours is one of the lowest being 10 per cent, even Ghana is at 25 per cent, rich ones they are 50 per cent.
“The very rich countries have to be most advanced in terms of social safety nets and their social security system at 70 per cent of GDP. Government spending definitely will lead to increase in revenues
“The number one source of revenue especially in the short term, even in the medium term is all revenue.”
The Chairman, Senate Committee on Finance, Senator Musa had earlier noted that the revenue projections of the ministries, departments and agencies of the government were lower than what the government has proposed as income for the 2024 fiscal year.
He also said that a lot of funds being generated as revenues by most “MDAs are not being remitted as at when due. Some even remits funds a year after they collected the money”
He called on the . Office of the Accountant General of the Federation to look properly in that direction, adding that the “current practice of delaying the remittances of revenues by the MDAs has created a room for the misappropriation of those funds”.
By Our Reporter
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, on Thursday told the National Assembly that Nigeria can no longer rely on external loans to fund national budgets.
Edun who appeared before the joint Senate Committee scrutinising the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper, said the country has to do everything to generate adequate revenues to be able to reduce deficit budget financing.
He also said the country needs to spend more money on infrastructure that can generate revenues.
He also disclosed that foreign countries have increase the interest rates lending as a measure of checking inflation for the good of their own economies.
Edun told the Senate, “Clearly the environment that we have now, internationally as well as nationally we are in no position to rely on borrowing.
“We have an existing borrowing profile. Our direction of tariff is to reduce the quantum of borrowing or intercepting deficit financing in the 2024 budget.
“Simply put, internationally there is a focus among rich countries on bringing down the inflation rate to stabilise the economies and give them opportunity for investment growth.
“They are in the process, sacrificing that immediate goal for compacting their economies, or at least contracting the money supplies and pushing up the interest rates and of course high interest rates and investments don’t go together.
“What is left for us to access those funds are expensive so it is the last thing that we must rely on.
“The last thing you can think of is to pile up more debts. Government needs to not just maintain its activity, it needs to spend more.
“If you look at government spending, if you look at the budget as a percentage of GDP, ours is one of the lowest being 10 per cent, even Ghana is at 25 per cent, rich ones they are 50 per cent.
“The very rich countries have to be most advanced in terms of social safety nets and their social security system at 70 per cent of GDP. Government spending definitely will lead to increase in revenues
“The number one source of revenue especially in the short term, even in the medium term is all revenue.”
The Chairman, Senate Committee on Finance, Senator Musa had earlier noted that the revenue projections of the ministries, departments and agencies of the government were lower than what the government has proposed as income for the 2024 fiscal year.
He also said that a lot of funds being generated as revenues by most “MDAs are not being remitted as at when due. Some even remits funds a year after they collected the money”
He called on the . Office of the Accountant General of the Federation to look properly in that direction, adding that the “current practice of delaying the remittances of revenues by the MDAs has created a room for the misappropriation of those funds”.
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