Why Nigeria must borrow to fund budget, capital projects – Official

Nigeria's ministry of finance building
Nigeria's ministry of finance building

The Director-General of the Debt Management Office (DMO), Patience Oniha, on Monday said the Nigerian government must take loans to fund the budget and capital projects.

Mrs Oniha spoke at the International Monetary Fund (IMF) Regional Economic Outlook for Africa themed “Domestic Revenue Mobilisation and Private Investment.”

According to the DMO boss, with Nigeria’s level of reserves, oil production and population, the nation cannot claim to be an oil producing nation like Saudi Arabia.

The need for the nation to borrow, she said, is necessitated by the shortfall in revenue.

She said, “We have since realised we should not be benchmarking ourselves against these countries. We borrow because there is revenue shortfall.

“The National Assembly passed the budget last week and we know it was higher than what the executive presented. So, as a debt manager, what I am looking for is to see where the funding of that incremental size may come in from.”

Mrs Oniha said the Nigerian government would take loans to make up for that shortfall in budget.

“All of government’s borrowings were targeted at infrastructural development,” she said. “Without borrowing, we won’t be able to deliver on the budget and I think we should be clear about that and a lot of that went into capital projects.”

As at the end of December 2017, Nigeria’s total public debt stock stood at N21.73 trillion.

Earlier last year, the government also raised bond (Sukuk) to finance some major road projects across the nation.

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