Nigeria can no longer afford to borrow to fund its budget – Adeosun

Kemi Adeosun, Minister for Finance [Photo credit: The BusinessPost]
Kemi Adeosun, Minister for Finance [Photo credit: The BusinessPost]

Nigeria can no longer afford to continue borrowing to fund its budget and must seek alternative fundraising mechanisms, Finance Minister Kemi Adeosun said on Tuesday.

Speaking at the quarterly presidential business forum in Abuja, Mrs. Adeosun said Nigeria should continue to diversify its economy to enable it generate more revenue to fund its budget.

“We need to mobilise additional revenue to fund our budget,” she said.

“We have got to get our budget bigger and to do that we cannot borrow anymore. We simply have to generate more revenue, we have to plug the leakages, we have to improve tax collection so that we can manage our borrowing.”

Speaking further on diversification, the minister said, “The problem is that we have been relying on oil and oil gave us a big budget size,” she said.

“It’s just one of our resources and as you know it’s only 10 per cent of our GDP. So, the rest of our economy – 90 per cent – really has to contribute to our revenue.

For two years running, Nigeria has pursued foreign loans in order to meet her record-high annual appropriation.
Nigeria has been in talks with the World Bank and the African Development Bank to take at least $2 billion in loans; with another $1.5 billion slated to be sourced from international borrowers, Reuters reports

In a separate effort that now appeared to have stalled, President Muhammadu Buhari also proposed a massive borrowing of up to $30 billion to finance major infrastructure projects across the country.

Lawmakers sceptical about the proposal expressed fears that it might not be favourable to the country in the long run, especially as the administration presented no clear plans of how it will utilise the loan.

Within this period, Mrs. Adeosun remained one of the most vocal proponents of external borrowing, using the lingering economic recession as a justification.

In May, the Finance Minister said Nigeria cannot afford to wait for recovered loot, thus justifying the borrowings.

“We cannot afford to rely on recovered loots to fund our budget, we have to go on short term borrowing,” she said. “What borrowing does for us is that it gives us flexibility because if we recover a lot from looted funds, we can always pay back.”

The N7.44 trillion 2017 budget has a deficit of N2.21 trillion indicating about 29 per cent of the budget is to be funded through loans, foreign and domestic.

On Tuesday, the minister also spoke on the benefits of the recently introduced Voluntary Assets and Income Declaration Scheme, VAIDS.

She said it “is aimed at improving revenue collection rate and generally improving domestic revenue mobilisation so that we can fund our budget sustainably.’’

The minister described as encouraging the response of Nigerians to the inauguration of VAIDS.

She expressed the hope that the Buhari administration would reposition Nigeria to the level that “we will not be so vulnerable as we have been in the past to oil price movements’’.

In his speech at the event, Acting President Yemi Osinbajo said the Muhammadu Buhari administration is committed to reviving the Nigerian economy within the next 18 months.

Mr. Osinbajo said the administration was determined to deliver on its promises to the electorate.

The acting president, who said that Nigeria was fortunate to have a leader in President Buhari, added that the administration would continue to ensure that public funds were spent efficiently.

“And I have said this repeatedly, that in some sense we are fortunate to have a leader like the president who at least we know, a straightforward and honest, and committed to ensuring government expenditure is spent the way it should be spent, and that people don’t do what they like.

“To that extent, I think we have the right environment at least in terms of government discipline and all of that, to be able to deliver on the promises that we have made.

“But, do not doubt for one moment at all, our commitment to ‎ensuring that we are able to deliver on the promises that we have made.

“Day after day, night after night we are working on these things. Practically every night we work on these issues. I believe very strongly that Nigeria will turn around.

“I have no doubt in my mind that if we are focussed even in the next 12 to 18 months, if we are focussed we will certainly see a turn around.’’

He, therefore, advised the private sector to partner with the government to achieve the set target

The Minister of Power, Works, and Housing, Babatunda Fashola, who also spoke at the event, stated that the government’s focus has been on how to ease doing business, enable the private sector to be the best it could be to compete and be efficient locally and globally.

“The private sector has always been in any economy with a capital disposition, the driver of growth, the driver of development and ultimately government must interface with the private sector,” he said.

“We want to hear from them where the shoes pinch most, where we can make it easier; where we can make it better and how we can do so.

“And it is only by understanding the problems that we can then offer quality solutions which will include executive actions, sometimes legislative actions, sometimes judicial interventions as a mixture of government’s policy options to help private sector do its best.’’


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  • Dawood

    Adeosun just gave the finger to the corrupt financial slave masters IMF and the World Bank. Just in case you missed it, it was also a finger to the criminal cabal in the Senate led by Saraki and Dino. The Senate had threatened to hold up the loan request. I’m digging Mrs. Adeosun more each day. Just to be clear, this “loan” IMF and the World Bank were eager to give Nigeria in exchange for slave conditions beneficial to western banks and looters, is OUR MONEY. This was the monies kpomo mouth Blow Fish Ikonji-iweala gave to western banks through Nigerian looters like Jonathan and his 40 thieves, Ibori, Saraki, and the rest of them. Ikonji-iweala was a fraud, and Adeosun is a God-sent. Where Ikonji Iweala opened the treasury for looters and western banks, Adeosun works hard through creative and patriotic means to put monies in our treasuries.

    • Ikechukwu Okeke

      Nigeria is a failed state

      • Eko don spoil finish!

        @ikechukwuokeke:disqus

        Yes O! And Raji Fashola is a local urchin who stole Lagos state into a mess. He received 3.2 trillion Naira
        in state revenues – including federal allocation – and disappeared 800 billion Naira and crookedly wrote down 2.43 trillion Naira as total revenue collected. Even the 2.43 trillion Naira false figure he blew it on nothing sensible or enduring.

        Almost all the things Raji Fashola endeavored to flatter to deceive collapsed on his empty head
        due frauds and his sheer inability to think. Raji Fashola took up a job above his low intelligence
        quotient as state governor and left Lagos state in debts now getting close to one trillion Naira
        and rising with interest rate, and still without water supply, school, or electricity supply to show
        for it. What a dullard, What a dunce. What a crook! And what a tragedy for illiterate Lagosians,
        just robbed into penury by a local street urchin called Raji Fashola.

        • No Komment

          “Akinwunmi Ambode, the new governor of Lagos state, in August 2015 revoked
          the corrupt self-allocation of over 25 plots of land in Lekki by his predecessor –
          Raji Babatunde Fashola – in his own final days in office.

          Most of these plots were allocated to Raji Fashola’s own relatives, aides and associates
          — including Yewande Animashaun – his cousin who also served as his special adviser
          on public health, and Wale Ahmed, who served as his commissioner for special duties.

          A female newscaster with a Lagos-based TV station was one of the beneficiaries,
          The Cable learnt. The land was officially parceled into 25 plots and shared by
          Raji Fashola who went on to sign the certificates of occupancy on May 26, 2015,
          three days to his exit from office.”

          …………..THE CABLE NEWS

      • Musikal2017

        @ikechukwuokeke:disqus

        Excuse me please, I am not trying to advertise or anything like that but just want to share the lyrics
        of my new album that will soon be released into the market next month, or latest by October 2017.

        Please sing with me as follows:

        Raji Ajibole…ole….Fasholajibole….ole,….ajibole….ole… (twice).

        Thank you.

    • Gbabe

      @disqussant777:disqus ,

      As Lagos state debt reaches one trillion Naira mark

      Why is
      Premium Times not doing any investigation report on the massive destruction
      caused in Lagos state by Raji Fashola’s roguery and un-accountability? It is
      not sufficient that readers are groaning and asking for justice on the 800
      billion Naira deemed stolen under Raji Fashola by sheer accounting fraud.
      The knock-on is the suspension and rot of the Lagos light rail construction
      system mid-way.

      The other
      white elephant project called Eko Atlantic City is also an abandoned project,
      after gulping billions of Naira under Raji Fashola, on the heels of near total
      collapse of the BRT city bus transport system under his incompetent watch.

      Some other
      housing projects including a foreshore estate building on Lagos Island adjacent
      the third mainland bridge is similarly abandoned. Meantime Lagos state debts
      hover around one trillion Naira and make up 25% of Nigeria’s foreign debt.

      Tellingly there’s no functioning primary
      or secondary public school in Lagos for all that waste of money in ignorant
      governance; and theft, due lack of intellectual enlightenment. But that’s what to
      expect where mid-streamer mediocre with bare understanding are dragged into
      public office by a plea-bargained drugs-running criminal in Lagos state.

      • Daniel

        Here is my reply to Dawood :

        “What do you mean by “Okonjo Iweala opened the treasury for looter…?”

        Take for example, is the ECA a constitutional creation? No.

        So when Fashola and Amaechi and co took Jonathan to court over it, what did you expect?

        That Nigeria did not save is a direct consequence of the inordinate ambition of those who wanted to be in power today. They won.

        So let us deal with facts ,instead of the pedestrian comments about looters and all sorts.

        Else we can begin to profile all those in this Buhari/APC Government to know where they are coming from. Shall we go there?

        And Nigeria not being able to borrow ,as Adeosun asserts, is not borne out of patriotic demand.

        It is rather true that this government has borrowed more than 3 trillion naira the past two years to fund a padded budget.

        The ‘chains’ Government is engaged in gross wastage ,like it accuses its predecessors, and corruption, like the GRASS CUTTING Scandal yet to be resolved.

        The presidential jet today is in London at the expense of our lean purse.

        We can no longer borrow because we are servicing our national debt with more than 24% of the budget.

        The Government of ‘chains’ cannot initiate policies to cut cost of governance.

        Borrowing is not the problem because we need to borrow wisely to develop.

        There are lots of developed countries whose national debt are up 100% of GDP. Some are even more.

        Bottomline : this government from day one was out to wreck the economy and it did.

        We are simply too broke and wreckless to borrow at this time.

        And if you say look inwards, then I say manufacturing in Nigeria is below 50% capacity. No electricity, no infrastructure.

        Your taxation policy may soon cause more social upheavals as we already have it.

        This is an acceleration to economic abyss”.

    • Daniel

      What do you mean by “Okonjo Iweala opened the treasury for looter…?”

      Take for example, is the ECA a constitutional creation? No.

      So when Fashola and Amaechi and co took Jonathan to court over it, what did you expect?

      That Nigeria did not save is a direct consequence of the inordinate ambition of those who wanted to be in power today. They won.

      So let us deal with facts ,instead of the pedestrian comments about looters and all sorts.

      Else we can begin to profile all those in this Buhari/APC Government to know where they are coming from. Shall we go there?

      And Nigeria not being able to borrow ,as Adeosun asserts, is not borne out of patriotic demand.

      It is rather true that this government has borrowed more than 3 trillion naira the past two years to fund a padded budget.

      The ‘chains’ Government is engaged in gross wastage ,like it accuses its predecessors, and corruption, like the GRASS CUTTING Scandal yet to be resolved.

      The presidential jet today is in London at the expense of our lean purse.

      We can no longer borrow because we are servicing our national debt with more than 24% of the budget.

      The Government of ‘chains’ cannot initiate policies to cut cost of governance.

      Borrowing is not the problem because we need to borrow wisely to develop.

      There are lots of developed countries whose national debt are up 100% of GDP. Some are even more.

      Bottomline : this government from day one was out to wreck the economy and it did.

      We are simply too broke and wreckless to borrow at this time.

      And if you say look inwards, then I say manufacturing in Nigeria is below 50% capacity. No electricity, no infrastructure.

      Your taxation policy may soon cause more social upheavals as we already have it.

      This is an acceleration to economic abyss.

  • Hamza

    Taxation is the answer.

    • Kingo Kizito

      How do you tax those faceless Almajiris in the North who have refused to be head counted as a strategy to continue to inflate their population during elections? What effort has the govt made so far to organise and prepare Nigerians for taxation? This woman has been talking of taxation since she was nominated. Until now, politicians and rich men park their cars and private jets in airports for months paying only 500 naira? Have you ever seen a parking space on pay in Nigeria? What of car insurance scheme? Rubbish. From reviving the economy in the first quarter of 2017, they are now talking about the next 18 months…Nonsense! How can a sick man who spend 10 months abroad and two months at home revive our economy? Nigerians are truly citizens of ZOO REPUBLIC.

      • Hamza

        Well, that is your opinion. But the govt does not have to prepare Nigerians for tax. There are so many ways tax can be collected. VAT on commodities people buy, excluding agricultural products, for example. The govt can increase PAYE for those earning.
        Yes there are a lot parking spaces that are billed in Abuja. I have paid for parking several times in Abuja. But then the people in charge of ticketing are corrupt. They capture only a little of what one paid. If you paid to park for 3 hrs for example, the guys may just capture 1hr and pocket the balance of the 3 hrs one is charged. I was curious one time and I went through the details of the ticket they left on my windshield and I was shocked to realize what the person did. They cheat on the system. That is one major problem with Nigerians. Corruption. If the govt can BLOCK LEAKAGES in revenue collection, a lot more extra income can be captured.

        Car insurance is optional. The risk is on the car owner if they chose not to opt for insurance. It is medical insurance that may be somewhat compulsory. And then when you have corruption and system abuse, almost everything is liable to fail.
        It is easy to criticize from outside. You may not be able to do what these guys are doing. You may even do worse when given the opportunity.

        About the sick man, I believe you never really liked or trusted the man. That is your personal issue. I know the man did not even wish to be sick. You also have a governor, a Chairman at the local level. Have you ever tried to hold them to account? Again. You would do well to help the economy in your capacity as a private citizen by producing something. You can produce even one piece of yam. Or produce some local chicken or smth that will help add value to the economy. Don’t just be a consumer who does nothing but to wait for someone to assist them. Minimize the energy you waste online and invest some of it in some useful venture.
        Peace!

    • vivas

      @Assaadd:disqus

      ONLY A BLOODY REVOLUTION CAN SAVE NIGERIA FROM TREASURY THIEVES.

      TREASURY THIEVES AND THEIR FAMILIES MUST BE KILLED FOR NIGERIA TO LIVE.

      • Hamza

        I agree with you 100%. But then how can there be a revolution when the youths are divided? Ethnic, religious and regional sentiments have beclouded the sense of reasoning of the Youths who should be in the forefront of the struggle for revolution.
        Unfortunately, there would never be a revolution, violent or otherwise, in Nigeria. Most of the youths do not even believe in Nigeria, rather they believe in belonging to their ethnic, religious and regional cocoons. Again, most of the youths believe in corruption as a way of life. You can see from student union politics how corrupt the youths can be. But. I am a Nigerian. I believe in Nigeria. I hope for a corruption free or minimally corrupt Nigeria.

    • 0tile

      What are they taxing people for? After borrowing to bankrupt the country where is the money? This is the most reckless government Nigeria has had in her sordid history, 2 years of borrowing and waste.

  • Justice Equity

    After all the lies,after all the falsehood peddling, after hiring internet warriors to deceive Nigerians, the cookie is crumbling very very fast.
    This government have exhausted every opening for borrowing, this mumuhari have finally bankrupted Nigeria. What a shame.

  • 0tile

    Is Calamity Kemi saying that all the $billions she and Buhari borrowed did Nigeria no good? Right from day one Mohamed Buhari went hog-wild borrowing money all over the world to feed and develop the North, not a single kobo went to SE SS. We hope they will not depend on Niger Delta oil to pay back the humongous debt nigbati(when) Buhari is gone.

  • Otile

    Yeah, but show me the money.