The Federal Government of Nigeria has
explained why it opted for conservative borrowing so as invest in infrastructure
to facilitate growth of the economy, according to the Finance Minister, Mrs.
Kemi Adeosun, reports ITRealms.
Speaking Tuesday, she explained
that the Federal Government opted for a conservative borrowing plan to fund the
critical sectors of the economy and to ensure that future generation is not
saddled with the burden of debt payment.
The Minister, who described borrowing as
inevitable in view of the current realities in the nation’s economy, spoke at a
town hall meeting/policy dialogue for good governance organised by the Alumni
Association of the National Association of the National Institute of Policy and
Strategic Studies, in conjunction with the Federal Ministry of Information and
Culture in Abuja.
A press statement by the Special Assistant on Media to Honourable
Minister of Finance, Mr. Festus Akanbi, to ITRealms said that other ministers at the event included those
of Information and Culture, Lai Mohammed; Solid Minerals, Kayode Fayemi; Power,
Works and Housing, Babatunde Fashola; Environment, Amina J. Mohammed;
Agriculture, Audu Ogbeh, Health Prof. Isaac Folorunso Adewole and the
Foreign Affairs Minister, Mr. Geoffrey Onyeama.
Stressing the urgent need to fund
infrastructure, Adeosun said “We have to invest in our infrastructure to allow
the private sector to thrive which will create jobs and unlock the economy.
We have to adopt a very conservative
borrowing programme but we must borrow because for us to do rail, we need funds
with other needed infrastructure we need funds.”
The Minister pointed out that some of the
existing rail lines in Nigeria were constructed during the colonial era, which
has to be massively upgraded and brought into the 21st century.
According to her, such investment will
trickle down to the people through its impacts on agriculture, rail and solid
minerals.
She stated, “The rail we have now was done
in the colonial era. There was no significant upgrade. We need to urgently do
rail for agriculture and solid minerals to be competitive, so I really don’t
see any option than to borrow but we will borrow sustainably; we will borrow
conservatively to make sure we don’t burden future generation.
In the past, Nigeria had been borrowing to
pay salaries but now we are borrowing to invest. When you borrow to invest,
there is an expectation that there will be additional revenue that will service
those borrowings.
We will borrow as cheaply as possible and
that is why we are approaching the World Bank and Export Credit Agencies to
provide concessionary loans. We are taking concessionary loans before going for
commercial loans.”
Speaking about the nature of the public
service inherited by the current administration, Adeosun stated, “We inherited
1.2million public servants with a wage bill of N165 billion per month. You
can’t send people away. What we can do is to build controls to make sure these
people exist and are validly working to earn their wages which is why we are
carrying out continuous audit which has revived our huge bills by N6billion per
month.
The Minister believed time had come to
focus on capital funding. She said, “We had to attack the problem of
recurrent expenditure. When we came in, over N165billion went on salary. As we
speak, we have reduced it to N159 billion.
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