Nigeria Plans to Borrow N6.17 Trillion in 2021 – Minister of Finance

The Federal Government will borrow a total sum of N6.17 trillion in 2021 fiscal year, according to the Minister of Finance, Budget and National Planning, Zainab Ahmed.

Ahmed, who presented to the Senate Committee on Local and Foreign Debts on Tuesday in Abuja, said the nation’s total debt will rise from the current N31.01 trillion or $85.90 billion to N32.51 trillion by December 31, 2020 given recent approvals.

The minister of finance said based on projections and existing approvals, the current national debt will rise to N38.68, meaning the Federal Government plans to borrow N6.17 trillion in 2021 alone.

Nigeria’s total public debt continues to rise despite the nation’s weak revenue generation and falling crude oil demand.

The International Monetary Fund (IMF) recently said Nigeria does not have a debt problem but a revenue generation issue. The Fund suggested that Africa’s largest economy should improve its tax collection efficiency to increase internal revenue generation, adopted a cost-reflective electricity billing system and unify the nation’s foreign exchange rate.

These were some of the terms reached before the Fund borrowed Nigeria $3.4 billion in the second quarter of 2020 during the peak of COVID-19 and record low oil prices.

However, the situation has not just worsened Nigeria’s economic position but has also continued to threaten its unity as the largely poor population impacted by COVID-19 are fast losing their poorly paying jobs and other means of livelihood, yet they have rising bills, among others to deal with.

Nigeria is expected to plunge into the second recession in four years in the third quarter given serious of recent events and declined in the nation’s economic productivity by 6.1 percent in the second quarter.

With the government grappling with low revenue generation and plunge in both oil demand and price, it is expected that President Muhammadu Buhari administration will turn to foreign nations or multilateral financial institutions for assistance.