- National Debt Still Within Sustainable Limit – FG
Despite calls for moderation on borrowing, the Minister of Finance Mrs Zainab Ahmed has said the nation’s debt is still within sustainable limit.
The national debt currently stood at N24.3 trillion.
This, according to the Minister, is about 19 per cent of the nation’s Gross Domestic Product of the nation and still low when compared to South Africa, Ghana, Brazil, Egypt and Angola.
She said, “In the borrowing, we are still at 19 per cent to GDP; our borrowing is still low.
“What is allowed by our Fiscal Responsibility Act is the maximum of 25 per cent of our GDP compared to other countries like Ghana, Egypt, South Africa, Angola and Brazil and we are the lowest in terms of borrowing.”
In a statement released by the Minister’s Media Adviser, Mr Paul Ella, she stated there was no plan to remove fuel subsidy as widely speculated.
She explained that the present subsidy arrangement was better than what was in place when oil marketers were paid directly for fuel subsidy.
She said, “NNPC is the sole importer of petroleum products, and so when they import it is the cost of business and they deduct that cost before they remit the little money to the federation account. So that is completely different.
“It is more cost effective, it is cheaper and what is being done now is easier to monitor what transpired.
“We are not there yet and we discuss this periodically under the Economic Management Team. But we have not found a formula that works for Nigeria and you know Nigeria is unique because what works in Ghana may not work in here.
“So, it is still work in progress and so there is no intention to remove fuel subsidy at this time.”
On revenue generation, she said that while the nation is struggling with revenue growth, efforts were being made to up revenue generation.
In the area of revenue generation, she said that while the country had revenue challenges, efforts were currently being made to shore revenue.
She said, “What we have is revenue problem and when revenues perform at the aggregate rate of 55 per cent, it hinders the ability to operate in our budget.
“So, it hinders our ability to service all categories of expenditures including salaries, allowances, capitals as well as debts.”
“So, what we are doing at the Ministry of Finance is concentrating and enhancing of our revenue and collection capacities.”
Nigeria currently owes World Bank $8.67 billion.
