Indications are that the federal government of Nigeria is wary of further borrowing haven seen mounting debt in the last two years. Minister of Finance Mrs Kemi Adeosun said in Abuja that Nigeria must not borrow more to fund its budget but should instead raise money it needs by other means. This could mean that the government has ditch the idea of raising loans from multilateral institutions. It will be recalled that the government had said it planned to raise foreign loans of $2 billion from the World Bank and Africa Development Bank AfDB.
Nigeria had at the beginning of the year planned to borrow extensively from overseas to fund the 2017 budget aimed at helping the country spend its way out of its economic recession.
Finance Minister Kemi Adeosun’s comments, made while speaking at a business forum in the capital of Abuja, suggest that Nigeria will no longer seek such loans, or an additional $1.5 billion it had planned to raise from international debt markets.
“We cannot borrow anymore, we just have to generate funds domestically enough to fund our budget. Mobilise revenue to fund the necessary budget increase,” she said.
In May, the head of Nigeria’s budget office said the country has a shortfall of $7.5 billion for its 2017 budget expenditure, and said that would be addressed with $3.5 billion from the aforementioned loans and debt. The government also planned to raise $4 billion from the local debt market, he said at the time. Nigeria’s presidency signed off 2017budget in June, after numerous delays. The plan projects a deficit of N2.21 trillion, implying a deficit equivalent to 2.18 per cent of Nigerian gross domestic product.
