BY COBHAM NSA, ABUJA – The Federal Government has assured Nigerians that the country’s foreign borrowings will no longer be managed irresponsibly and wastefully.
Minister of Finance, Mrs. Kemi Adeosun, who gave this assurance, said the days of irresponsible borrowing and imprudent management of loans by government are over for good.
This is even as she said the International Monetary Fund (IMF) and the World Bank Group (WBG) have projected a positive outlook of higher growth for the Sub-Saharan Africa and global economy in 2018.
Addressing a joint media conference with the Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele at the end of 2017 Annual Meetings of the IMF and WBG in Washington, Adeosun said; “This Government will be very prudent around debt. We won’t borrow irresponsibly.”
She said government’s adoption of an expansionary fiscal policy with an enlarged budget is to deliver fundamental structural change to the economy and reduce the country’s exposure to crude oil, adding that; “Why are we borrowing? Mobilising revenue aggressively was not advisable, nor indeed possible, in a recessed economy. But as Nigeria now reverts to growth, our revenue strategy will be accelerated.
“This is being complimented by a medium-term debt strategy that is focusing more on external borrowings to avoid crowding out the private sector”, she said.
According to Adeosun, who led Nigeria’s delegation to the 2017 IMF and World Bank Annual Meetings, “This would also reduce the cost of debt servicing and shift the balance of our debt portfolio from short-term to longer-term instruments.”
She said that developments in the global economy since the Spring meetings were reviewed, noting that growth had picked up in 2017 even though not even.
“Global growth is estimated to be 3.6 per cent for Fiscal Year 2017, while Sub-Saharan Africa (SSA) is projected to grow at 2.6 per cent and outlook is for higher growth in Fiscal Year 2018.
“However, down side risks remain in the medium-term with high policy uncertainty, geopolitical tensions. Inflation remains subdued,” she said.
Giving insights about the WBG and IMF meeting, the Minister said the dominant policy priorities for member nations was boosting potential output and improve income distribution while improving financial sector resilience, adding that both Bretton-wood institutions challenged commodity exporters like Nigeria, to pursue structural policy reforms towards unlocking its potentials; stimulating aggregate supply; and enhancing the diversification process.
Speaking on the Development Committee (DC) meeting, Adeosun said members discussed enhanced capacity for the International Bank for Reconstruction and Development (IBRD) and International Finance Corporation (IFC) to meet their obligations of supporting the financing needs of client countries and to prevent a slowdown in lending.
In her words; “At the DC where I spoke on behalf of Angola, Nigeria and South Africa, I urged the international community particularly the Bretton-wood Institutions to change the narrative on Africa which always portray the continent as Low Income Countries (LIC).
“Indeed, there are some Middle Income Countries represented by this constituency and so there is the need for the Bank to deploy instruments, policies and programs that will address the peculiar needs of these countries.”
The Minster, while reacting to the issue of investing in women, said the female gender remained the best investment any nation could make, maintaining that; “The multiplier effect of such investment is significant. We need to make more opportunities available to our women. They are the economic drivers of our nation. We have enormous talents in Nigeria, and the Federal Government will invest in human capital.”
On his part, CBN Governor, Mr. Godwin Emefiele, said marginal growth has been witnessed in the Nigerian economy, saying; “The fundamentals we are seeing show that there is a lot of stability in the foreign exchange market, and having come down from high level to the level we are now, and the currency is just fluctuating between N359/N365 to dollar.”
For him, “We think it is good level compared to where we are coming from. We think it is important to note that as reserves get stronger, as economic fundamentals get stronger, there is no doubt that the naira will get stronger and we will see more appreciation in the currency.”
He said the apex bank would work to check significant threats that could affect the strategic health of Nigeria’s banking system, adding that support for Federal Government’s efforts to reduce unemployment and create jobs would also remain on the front burner for CBN.
The Minister and CBN Governor participated in the International Monetary and Financial Committee (IMFC) and Development Committee (DC) meetings, which are the two highest decision making organs of the Bretton-woods Institutions.
