FG borrowings sensible, responsible-Finance Minister
The Federal Government has defended the country’s borrowing spree, insisting that the level of borrowing is still at 23 per cent of the Gross Domestic Product (GDP), adding that government borrowing is sensible and responsible.
The total outstanding public debt stock increased by 173per cent in the same period, from N12.11 trillion to N33.10 trillion.On the average, over N3.6 trillion is being added to the public debt yearly. This massive borrowing and the infrastructure investment that has been used to justify it, have grossly under-performed.
Critics said instead of delivering economic growth, the economy has been twice in recession, and when out of it, growth has been underwhelming at two per cent at best. And rather than the debt-funded infrastructure projects creating ample number of jobs for the citizens, the national unemployment rate has increased to 33.1 per cent, while youth unemployment has reached 42.5 per cent.
But the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, while addressing newsmen on the recent rise in the country’s GDP in Abuja on Monday, said that the government borrowing is sensible and responsible.
The National Bureau of Statistics (NBS) recently announced the GDP growth of 5.01 per cent for Q2 2021 for the country.
Ahmed explained that the government was borrowing to invest in critical infrastructure like: power, water, roads and rails required to enhance business productivity in the country.
“We are borrowing with a very close consideration to the sustainability of the borrowing. The borrowing level for Nigeria today is still 23 percent of the GDP.
“I have said it several times that the problem we have in Nigeria is that of revenue and when you look at the country that are within the peer group with Nigeria, there are some that had 50 per cent growth that are now at about 70 per cent growth.
“We are at 53 despite the escalated borrowing we had to deal with in 2020 also in 2021 to get a good grip on the economic situation that was occasioned by COVID-19 pandemic and in our case due to the crash in crude oil price.
“We are borrowing sensibly we are also borrowing to invest in critical infrastructure like power, water, roads and rails which are investments that are required to enhance business productivity in the country today.
“These businesses will grow, they will not only pay taxes, they will also employ people. If we don’t do this, we will regress even from where we are today. It is a necessary investment so we are borrowing responsibly.
“We are making sure what we are borrowing is applying to major infrastructure that will return revenue in the near future” she explained.
