Nigeria’s debt still within acceptable limit – Finance minister

Finance minister, Mrs Zainab Ahmed

Nigeria’s debt still within acceptable limit – Finance minister

Ifeanyi Onuba, Abuja

The Minister of Finance, Mrs Zainab Ahmed, has said that Nigeria has enough capacity to repay its debt obligations which stands at about $22.08bn.

A statement from her Media Adviser, Paul Abechi, stated that the minister said this at the Deloitte Economic Outlook conference, where she presented a paper titled, ‘Revenue growth and economic development: Expectations for 2019.’

The Monetary Policy Committee of the Central Bank of Nigeria had at its meeting on 22nd January cautioned the Federal Government against the rising debt level in the country.

The committee had warned that except the Federal Government adopted measures to address the country’s debt level, Nigeria’s debt burden might rise up to the pre-2005 Paris Club Level.

In October 2005, Nigeria and the Paris Club announced a final agreement for debt relief worth $18bn and an overall reduction of Nigeria’s debt stock by $30bn.

The deal was completed on 21st April, 2006, when Nigeria made its final payment and its books were cleared of any Paris Club debt.

Based on statistics released by the Debt Management Office, Nigeria’s debt profile as of June 30, 2018, was $22.08bn.

But speaking on the country’s debt profile, Ahmed said that the government was not worried about the country’s rising debt as the debt to Gross Domestic Product ratio was still low compared to other countries.

The minister said the Federal Government had been very strategic in accumulating its debt, adding that the debts were being massively invested in the development of infrastructure.

She said, “We have been very strategic in the management of our debts, revenues, infrastructure, and human capital.

 “These plans and the tighter coordination, monitoring within and among Ministries, Department and Agencies with economic functions have placed us on a positive trajectory.

“We intend to maintain a steady course. Our borrowing is still within very good fiscal limits.

“Global trends reveal a slowdown in global economic growth exacerbated by global risks.

“Despite these trends and pursuant to our policies in the Economic Recovery Growth Plan, we have seen the economy exit from recession and move the economy upwards on a path of sustainable, inclusive and diversified growth.”

While acknowledging that the country had a revenue problem, she noted that measures were currently being taken to shore up revenue particularly from non-oil sources.

She added, “The problem we have is that of revenue. By prioritising revenue generation, the Federal Government intends to continue significant investments in human capital and critical infrastructure to sustain the growth trajectory.

“Historical performance analysis shows that we are succeeding in growing our revenue. We have chosen to be strategic in our response and we recently launched the Strategic Revenue Growth Initiatives to achieve sustainability in revenue generation; identify new and enhance enforcement of existing revenue streams, and achieve cohesion of people and tools.

“Our targeted revenue to GDP ratio is 15 per cent as set out in the Economic Recovery Growth Plan.”

Ahmed stated that the Federal Government would continue to invest in the implementation of the ERGP by leveraging finance for critical infrastructure and its social investment programmes.

These investments, she noted, would guarantee a sustainable future for Nigerians.