UPDATED: Nigeria must not borrow more to fund its budget says finance minister

    0
    558
    Workers stand along a prototype rail line, to be constructed by China Railway Construction Corporation (CRCC), during the ground breaking for the construction of Lagos-Ibadan rail line project at the Ebute-Metta headquarters of the Nigerian Railway Corporation in Lagos on March 7, 2017. Nigeria's acting President Yemi Osinbajo has signed off on the construction of the Lagos-Ibadan double track railway line modernisation project to be executed by the China Railway Construction Corporation (CRCC). The project, when completed, will open up direct transit from the coastal city of Lagos, Nigeria's commercial capital, to Ibadan, in the heart of the south west. / AFP PHOTO / PIUS UTOMI EKPEI

    ABUJA, July 11 – Nigeria must not borrow more to fund its budget and should instead raise money it needs by other means, the country’s finance minister said on Tuesday, calling into question planned foreign loans of $2 billion from lenders like the World Bank.

    Africa’s largest economy is in its first recession in 25 years, and had planned to borrow extensively from overseas to fund a record budget aimed at helping the country spend its way out of its economic doldrums.

    But plans for lenders like the World Bank and African Development Bank to loan at least $2 billion to Nigeria have been stalled for over a year as international organisations’ frustrations mounted at the country’s refusal to impose key fiscal reforms such as allowing its foreign exchange rate to float freely.

    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. Mobilize 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 on its record 7.44 trillion naira ($24.39 billion) budget for 2017 in June, after numerous delays.

    The plan projects a deficit of 2.21 trillion naira, implying a deficit equivalent to 2.18 percent of Nigerian gross domestic product.

    SHARE
    Previous articleMy face-off with National Assembly is to get better results – Fashola
    Next articleEnsco gets three drillship contracts in Nigeria
    Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    This site uses Akismet to reduce spam. Learn how your comment data is processed.