Nigeria’s Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, has stated that Nigeria cannot rely on borrowing to fund the 2024 budget. He emphasized the need for the country to generate more revenue and reduce its high deficit financing.
Edun highlighted that accessing foreign loans would be expensive for developing countries like Nigeria due to the prevailing high interest rates. This makes borrowing an unfavorable option.
Nigeria already faces a significant burden of debt servicing, with debt servicing accounting for 98 percent of government revenue. Piling on more debt would only exacerbate this issue.
The minister stressed the importance of increasing government spending and investing in revenue-generating infrastructure. By focusing on revenue generation, Nigeria can reduce its reliance on borrowing and improve its financial stability.
Edun emphasized that investing in infrastructure that can generate revenue is crucial for funding the annual budgets. This approach aligns with the practices of advanced nations and can contribute to economic stability and growth.
The minister highlighted that Nigeria’s government spending as a percentage of GDP is relatively low compared to other countries. Increasing government spending can help stimulate economic activity and improve social safety nets.
The Senate committee expressed concerns about revenue shortfalls in various government agencies. They noted that funds generated as revenues by these agencies are not being remitted promptly, leading to misappropriation. The committee called for a thorough investigation into these practices.
Waivers and Customs Modernization: The committee also raised questions about the issuance of waivers and the e-customs project. They sought clarity on the agencies responsible for issuing waivers and the details of the customs modernization project. These inquiries aim to ensure transparency and prevent a deficit budget in the future.