The Director-General of Debt Management Office (DMO), Dr.
Abraham Nwankwo has said that the Federal Government is fully committed to
ensuring that all fund borrowed to finance the 2016 budget, will be dedicated
to fund capital projects, reports ITRealms.
Nwankwo stated this on Tuesday at a one-day workshop by DMO
on “Public Debt and the challenge of financing Nigeria’s economic recovery”
organised for Capital Market Correspondents Association of Nigeria (CAMCAN) in
Lagos.
“The DMO is committed to making sure that we raise money to
fund the 2016 budget deficit from appropriate sources and through appropriate
mix during the fiscal year to make sure that capital projects are funded,” he
said.
The DMO boss who stressed that the Nigerian debt level is
highly sustainable, noted that the nation still had a lot of idle potential,
which the administration is currently working to harness for effective growth
of our national economy.
According to him, while comparative tax revenue to GDP ratio
of Nigeria is less than 7.0 per cent, its peer group has a ratio of 18 per
cent. He therefore, stressed the need to
widen the tax net to generate more revenue for the government.
“The debt to GDP ratio is 13 per cent, compared to the 56
per cent of peer group. So in that
essence, our debt is still very sustainable. In this respect, I am encouraging
all Nigerians to continue to make sure that they pay their taxes fully as at
when due because our tax revenue GDP ratio is relatively lower to countries in
our peer group. As our economy grows, as
our GDP grows, as we are collecting enough in taxes from individuals and
corporates bodies to be able to fund capital projects, our economy will
continue to grow” he said.
He said the debt sustainability and overall economic
sustainability can be significantly influence by individuals and corporate bodies paying taxes fully.
Speaking on the economic recession caused mainly by
unfavourable structural change in the fall of oil prices globally, he said the
Nigerian government is addressing the challenge through diversified,
self-sustaining growth in agriculture and agro processing, solid minerals,
manufacturing and ICT.
According to him, in the medium to long term, debt
sustainability in Nigeria hinges on the overall sustainability of the economic,
and the overall economic sustainability hinges on diversifying the economy in a
sustainable manner.
“That is what the government is doing in agriculture, solid
minerals, ICT and manufacturing. And to do that we need a strong infrastructure
base and that is why government is spending what is borrowing on capital
projects,” Nwankwo said.
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