Nigeria: Again, Finance Minister Allays Fears On FG's Borrowing

1 February 2019

The Minister of Finance, Mrs. Zainab Ahmed, has again allayed fears over federal government's borrowings, declaring that there was no cause for alarm as the borrowings still remain within the fiscal threshold.

The minister spoke in Lagos at the Deloitte Economic Outlook conference, where she presented a paper titled: 'Revenue Growth and Economic Development: Expectations for 2019'.

According to a statement issued by the minister's media aide, Paul Ella Abechi, she explained: "We have been very strategic in the management of our debts, revenues, infrastructure, and human capital. These plans and the tighter coordination, monitoring within and among Ministries, Department and Agencies (MDAs) with economic functions have placed us on a positive trajectory. We intend to maintain a steady course. Our borrowing is still within very good fiscal limits.

"Global trends reveal slowdown in global economic growth exacerbated by global risks. Despite these trends and pursuant to our policies in the Economic Recovery Growth Plan, we have seen the economy exit from recession and move the economy upwards on a path of sustainable, inclusive & diversified growth."

Although she acknowledged that the problem was that of revenue, the minister noted that by prioritising revenue generation, the federal government intends to continue significant investments in human capital and critical infrastructure to sustain the growth trajectory.

The minister maintained that the nation's revenue has been growing successfully based on government's policies and programmes initiated to ensure that revenue generation base is diversified.

"Historical performance analysis show that we are succeeding in growing our revenue. We have chosen to be strategic in our response and we recently launched the Strategic Revenue Growth Initiatives to achieve sustainability in revenue generation; identify new and enhance enforcement of existing revenue streams; and achieve cohesion of people and tools.

"Our targeted revenue to GDP ratio is 15 per cent as set out in the Economic Recovery Growth Plan.

"We will continue investing in the ERGP implementation by leveraging finance for critical infrastructure and our social investment programmes. These investments, we believe, will guarantee a sustainable future.

"In 2019 and in line with the Economic Recovery and Growth Plan (ERGP) 2017- 2020, we will continue to invest resources in achieving our fiscal priorities which are: Enhancing Revenue Generation, Collection and Monitoring; Fiscal Consolidation by Optimising Priority Capital and Recurrent Expenditure; Optimising Management of both Domestic and

Global Fiscal Risks; and Increased Coordination of Fiscal, Macroeconomic, Monetary and Trade Policies," she said.

But she noted that there was the need to do more to achieve high revenue generation.

"We still need to do more to achieve higher revenue outturn as peer comparison on our ability to convert Gross Domestic Product (GDP) to revenue for capital and social investment show that we have a lot to do," she stated.

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