Notwithstanding Nigeria owing $86.39 billion (N32.9 trillion) to external creditors, the nation will continue to borrow to finance infrastructural development, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said yesterday.
She also stated that a supplementary budget for 2021 was being prepared for submission to the National Assembly for approval in March. In addition, the federal government may soon compel Ministries, Departments and Agencies (MDAs) to patronise locally-made vehicles.
Ahmed told reporters in Abuja that although the country has expanded its borrowing portfolio, it is still below 25 percent of debt-to-GDP ratio and within borrowing limits.
She said, “The total borrowing of the country as of 31 of December (2020) is 21.6 percent of the GDP. So, if we were not looking at adding the other category of loans that I mentioned, we don’t even need to increase that at this time. As of 2019, the Debt-to-GDP ratio was 19.2 percent, so only two percent was added”. According to her, though the loan issue is a touchy one, it is not out of place for the government to borrow to stay afloat while striving to increase its revenue.
The Minister said care has to be taken to ensure that only projects that will enhance the business environment and yield more revenue into the treasuries of the country are embarked upon.