• Minister insists on borrowing to finance budget deficit

The increasing debt service of Nigeria is an economic threat to the country, the Securities and Exchange Commission declared on Thursday.

But this might not stop the Federal Government from borrowing to fund the 2021 budget, as the Minister of Finance, Budget and National Planning, Zainab Ahmed, insisted that government had to borrow.

In January, The PUNCH reported that Nigeria spent almost N2tn on debt servicing payments from January to September 2020, based on data obtained from the Debt Management Office.

At the 5th Annual Budget Seminar of the Securities and Exchange Commission with the theme, “Financing Nigeria’s budget and infrastructure deficits through the capital market,” the SEC also stated that shocks to commodities were affecting revenue generation.

It disclosed this in a presentation delivered by the Head, Economic Research and Policy Management Division, Office of the Chief Economist, SEC, Afolabi Olowookere.

The commission said, “Total public debt has increased from N5.24tn in 2010 to over N32tn in 2020. Still fine at around 20 per cent of GDP (Gross Domestic Product).

“But rising debt service is a threat. Also shocks to commodities price (are) affecting revenue. And low tax to GDP ratio.

“Moving towards improved sustainability may require future debt tied to revenue-generating projects.”

The commission observed that Nigeria’s budget had more than doubled in the last 10 years, while the country’s deficit had increased several folds.

“But capital expenditure and infrastructure estimates have not increased much. Implying deficit is often incurred to finance short-term consumption (unproductive) items,” the commission stated.

The SEC report also stated that the Federal Government’s Economic Recovery and Growth Plan projections were largely unmet.

But in her remarks, the finance minister stated that the country had to borrow to finance its budget given the urgent need to build infrastructure required for creating an enabling environment.

This, Ahmed said, was further underscored by the current global pandemic with its attendant effects to Nigeria’s daily economic and social activities.

She said, “In order to provide the necessary infrastructure and still continue to meet other immediate expenditure needs, government often adopts deficit budgets which have to be financed through borrowing.

“In this regard, the capital market is very key. Of course, experience has shown that the Nigerian capital market has been very supportive in providing the necessary funds to finance government programmes and projects.”

Ahmed explained that the aggregate Federal Government budget together with the budgets of government owned enterprises and project tied loans was N13.59tn.

The minister said, “The (2021) budget has a total aggregate capital expenditure of N4.37tn amounting to 32.2 per cent of the total expenditure.

“The budget also has an overall deficit of N5.6tn to be financed almost equally from domestic and foreign sources.”

Ahmed stated that Nigeria needed to spend more now on infrastructure and other capital projects, as the benefits of spending resulted in Nigeria coming out of recession after two quarters of negative growth recently.

She further stated that the government could not finance infrastructure alone, but would have to partner the private sector through the capital market.

The minister urged capital market operators to consider retail investments and give opportunity to ordinary Nigerians to invest in the capital market in an easy and simple way.

https://m.punchng.com/Business/Nigerias-rising-debt-servicing-an-economic-threat-SEC

Tax, borrow and spend. That's the mentality of those in government. If the spendings are done judiciously, it would have made things easier to understand. But what we have here is a situation where a thoroughly confused government is desperately borrowing the country to death while using the same borrowed funds to award some overwhelmingly alarming contracts that are riddled with corruption and typical over-invoicing. Take for example the infamous Abuja-Kaduna-Zaria Road Contract that was awarded for nearly 1 trillion naira by Fashola and the gang.., at over 2 billion naira a kilometer! A project that has now won the Guiness world record for the highest amount spent on a kilometer of road anywhere in the world! Isn't that vicious? Can any patriot who genuinely loves his country be this wrechless with scarce funds? How can their salaries, estacodes, emoluments and other corrupt remuneration still be the same when they even borrow to pay workers meagerly!??

It obviously tells you that even those who run this country on day to day basis don't believe in the country! They actually hate this country! No president who has an iota of affection for his country runs it down this inglorious way! What will the next administration do after the economic crimes being committed by Buhari? The next president will then have to spend his four year term, servicing and paying debts incured by the last administration? Funds borrowed to build railways and power stations in Niger republic!? Put bluntly; maladministration is cultural to some thick heads in this country! Or how else would you explain a situation where a presidents daily routine simply revolves around increasing taxes, borrowing billions, spending mainly on projects in other countries, appointing cronies and ethnic henchmen to strategic positions and then making sterile speaches before disappearing into Aso rock for sleep!? Isn't that the height of administrative delinquency??

All thanks to the vegetable in Aso Rock and that can't think of how else to create wealth but to borrow and tax.

Buhari has plunged generations into debt.

It's unfortunate, how educated people in this country elected a dullard to rule them remains a mystery.

The destiny of next tenths future generation of Nigerians have already been used as collateral by Bubu and his armies of Fulanis in government

The oldie in Aso Rock is extremely dull; he's not even fit to be a primary school headboy. The only thing he thinks of is how to borrow money; he never thinks of new sources of revenue generation. If leadership was all about borrowing money to fix infrastructure, even my late granny would have done a better job.

Customs says they make a lot of money, the government introduced new taxes, we sell crude oil, he said he cannot pay oil subsidy, they increased electricity tariff, yet they are still borrowing. What the fvck are they doing with all this money?

Buhari has been shouting diversification since 2015, but the NNPC is spending Nigeria's hard-earned money prospecting crude oil in their dead north.

E no go beta for the person wey curse Nigeria with daft leaders.

Buhari will ruin this country....can't wait to see the back of this misfortune and his foot soldiers..2023 is in God's hands.

keep borrowing, continue borrowing and remain a borrower for life.....

Basically if we want to stop borrowing...we have to

1.Remove subsidies on fuel and power

2.Widen the tax base so that we can raise our tax to gdp ratio from 6.1% to 23-30% to put us on par with Ghana and SOuth Africa. (Even Niger has a tax to gdp raito of 15%)

3.Diversify..

From all of us at vulturebbqrillz we thank you our darling daddy for transforming the country into a great one. We humbly support your reelection for a 3rd term
Sai Baba
Sai 4+4

Damnnn niggarrrr
Isoright ..
Borrow Borrow

Bad

It shall never be well with everyone who voted this incompetent government into power!

APC and borrowing, bread and butter!

Nothing from this regime shock me anymore. If anything still dey shock you then you are a hypocrite, you are only deceiving yourself.

Buhari leadership style zero

Buhari is a failure, any day, any time.

Una dey ment

Has there ever been a year this government hasn't borrow since they came on board? Are they not making any money? How about all these audio recovered money?


These guys have borrowed Nigeria future, I pity the person who will be the next president.

Awon oniyeye...dem don borrow their life join debt





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Nigeria and debt has always being 5 and 6
Gettin worse by the day


Na dem na

This is what you get when you select people into key positions just because of the regions they come from, their religion and tribe.

But this Buhari na one bush man o...

both Buhari and Wike my State governor are highly guilty of this act. Today fuel price have sharply ascended in bid to extort wealth from the poor to finance the luxury of the rich, this country's challenges is majorly caused by our irrational political leaders who does understand economic management. As for Rivers state we are gasping for breathe, if we can have an institutions that will teach gubernatorial aspirants economic management and policies before the elections I tell you, it will go a long way. Wike is a misfit

Threat to the Poor people and the masses, Not to You People

Hmmm

All thanks to the dullard

Borrow to build railway to niger republic,
Make una continue borrow na, borrowing for embezzlement

Giant of Africa