2 November 2017

Nigerian Govt's Strategy Will Ease Debt Service Risk - Adeosun

Photo: The Guardian
(file photo).

The Minister of Finance, Kemi Adeosun, has expressed confidence that the federal government's revenue and debt management strategy would mitigate the country's debt service risk and fast-track her development.

The minister, who welcomed the advice of Nigeria's international development partners, including the International Monetary Fund, said the strategy would achieve a number of objectives that include: mobilising revenue whilst reducing the debt burden by lengthening the maturity profile, increasing foreign exchange reserves, reducing crowding-out of the private sector, and creating savings in debt service cost.

The minister stated that a key element of the economic reform strategy was the mobilisation of revenue to improve the debt service to revenue ratio.

This is being undertaken through a number of initiatives including, the plugging of leakages and the deployment of technology revenue management.

She specifically cited the example of the Health Pay, a pilot cashless revenue project in the health sector, which recorded material increases in revenue.

The ongoing Voluntary Assets and Income Declaration Scheme (VAIDS) was equally expected to impact positively the level of tax collections.

Mrs. Adeosun said, "The difference in our economic strategy is that we are changing the mix of revenue sources available to government from the traditional oil or debt to a combination of oil, debt and domestic revenue.

"This is a long term strategic reform which is critical to our future economic growth and in the short term will enable our debt service to revenue ratio to improve."

In addition, the minister noted that the government was refinancing its inherited debt portfolio and this will lead to significant benefits, particularly a reduction in costs of funds.

"The proposed refinancing of $3 billion worth of short terms Treasury Bills into longer tenured international debt is expected to save N91.65 billion per annum.

"Other benefits of our revenue and debt management strategy include: improvement in foreign reserves as well as reduced domestic debt demand, which will reduce crowding-out of the private sector and support the aspirations of the monetary authorities to bring down interest rates," the minister added.

More on This

Our Economic Strategy Will Mitigate Debt Service Risk, Says Adeosun

The Minister of Finance, Mrs Kemi Adeosun, has expressed confidence that the Federal Government's revenue and debt… Read more »

Copyright © 2017 Premium Times. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 900 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.