Nigeria not in debt crisis – Minister

Nigeria is not in any way near a debt crisis, according to the Minister of Finance, Mrs. Zainab Ahmed.

The minister disclosed this yesterday while responding to questions during a media briefing at the end of the International Monetary Fund (IMF)/World Bank Annual Meetings in Bali, Indonesia.

The federal government is seeking approval to issue fresh Eurobond of about $2.8 billion.

Already, the nation’s total debt stock (federal, FCT and states) had been put at N22.38 trillion ($73.21 billion) as at June 30, 2018.

But Zainab maintained that, “We don’t have a debt problem because at the ratio of three per cent of Gross Domestic Product (GDP), we have one of the lowest debts, in fact the lowest debt among our comparative countries.”

According to Zainab, “What we have is a revenue problem and we need to work to increase our revenue to ease our debt service obligations.”

She stressed the need for government agencies to enhance domestic revenue mobilisation so as to ease the debt service burden.

“We have a lot of headroom to borrow but we are not rushing to borrow more because we have to consider the foreign debt service that we carry,” she explained.

The minister promised that going forward, once a sum is released for capital projects, a schedule of the projects the funds is expected to cover would also be released.

“Subsequently, we are looking at the possibility that when we release capital projects, we would clearly determine what projects the funds are released for,” she said.

Zainab added: “We really are in a situation where we have to consider increasing building fiscal buffers because even though the global economy is going positively upward, there is still a lot of fragilities.

“A lot of countries, including our own, and the next wave of recession that might hit the global economy might not be the one that any country can quickly come out from unless the country has sufficient buffers.

“So as a country, both the federal and the states, we have to look at how to save more and we have to look at how to invest more in critical infrastructure that will yield revenue.

“There are only a few countries in the world that have saved so much in the world that any shock will not affect them. So we have to do this to protect ourselves from external shocks that we are now seeing coming from increase in rates in the US,” she added.

According to the finance minister, the proposed Eurobond that would be issued this year, if approved by the National Assembly, would be to fund the 2018 budget.

“The budget has approval for us to borrow both locally and internationally and we have a bond issuance within the range of $2.8 billion that we need to raise before this year closes. That will be used to finance the capital projects in the 2018 budget.”