Amid growing concerns over Nigeria’s debt profile, the Minister of Finance, Budget and Planning, Mrs Zainab Ahmed, has said the dual reality of COVID-19 pandemic and the drop in the price of oil in the international market has made it inevitable for Nigeria to keep borrowing from external bodies.
She stated that before the global health and economic challenges, Nigeria had been grappling with low revenue, noting that the crises had put the country in a difficult situation, which had made it difficult for the government to meet some of its obligations.
The minister spoke recently at a webinar organised by the Nigerian Economic Summit Group, Fiscal Policy Roundtable and Tax Investment and Competitiveness Policy Commission and was anchored by a tax expert, Taiwo Oyedele, who is the Fiscal Policy Partner and West Africa Tax Leader at PricewaterhouseCooper.
The minister, who was represented by the Special Adviser to the President on Finance and Economy, Mrs Sarah Alade, said government was doing its best to make sure the revenue base was broadened and expenditure reduced. She noted that if citizens also participated by paying taxes and doing the right things, it would go a long way in solving the country’s problems, especially raising revenues.
Meanwhile, many economists and prominent Nigerians have expressed reservations over the country’s rising debt liabilities.
As of March, the Vice Chairman, Senate Committee on Local and Foreign Debts, Senator Muhammad Enagi, said the country’s total debt would have risen to about N33tn after the Senate approved the President’s request to take another $22.7bn foreign loan.
But, Ahmed said, “We’ve had to grapple with low revenue, even before the pandemic. We had high debt, weak infrastructure base, low human capital and low revenue that is largely dependent on the foreign exchange earned from oil. So, there are many things we have loved to do that we cannot do.
“Due to the global economic slowdown and the revenue issues, what we are expecting is a GDP that would contract, in the best case scenario, by about 4.4 per cent and in the worst case scenario, it could be about eight per cent or more.