FG Working To Bring Down Borrowing Now At 4% Of GDP – Finance Minister

BY VICTOR BUORO, ABUJA – Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed has said that the Federal Government is working to bring down its borrowing which is presently at about 4 per cent of the nation’s Gross Domestic Product (GDP) as against the initial 3 per cent fiscal threshold target.

She said that with the 4 per cent borrowing, it is clear that the country is fast exceeding its borrowing plan for 2021.

Ahmed, who stated in an interview with France 24, however blamed the development on the COVID-19 pandemic and the fall in oil prices, adding that inflation has also continued to heighten and worsened by inadequate supply of foreign exchange.

The minister noted that the problems have a lot of multiplier effects on the economy, saying that the fiscal space remains tight now, adding however  that the federal government is re-planning, cutting down non-essential expenditures and providing resources where they are most needed like in the health sector.
She stressed that a World Bank report, which put a large portion of Nigerians under the poverty line is quite disturbing, saying it was caused largely by the COVID-19 pandemic and fall in oil prices.

Ahmed explained that the economic sustainability plan is targeting massive recruitment, health insurance, and a review of the poverty indices to redress the setback caused by COVID-19.

Commenting on the revenue side, Ahmed said that the target is to move revenue to GDP from the current 8 per cent to 15 per cent, stressing that 8 per cent is low for the size of the Nigerian economy.
On ease of doing business, against the backdrop of the Federal Government’s suspension of Twitter’s operations, the Finance minister said it won’t affect Nigeria’s image, saying that no foreign body should be allowed to cause war in the country.

In her words; “You cannot shut out the president of a country and not expect consequences. The suspension of Twitter is a well-thought-out decision. It shouldn’t affect the country’s image in the eyes of international investors”.
Ahmed noted that the move is “not something that we take lightly,” adding that the government has planned talks with the social media company over the issue.

Ahmed expressed optimism for a strong upsurge in the growth of the economy by the end of the year I spite of the recession in 2020 largely due to a drop in oil prices.

She further said; “The government is planning to create jobs with massive new investment in public works and low-cost housing while the extra spending would be funded by increasing tax revenue and improving tax collection process”.