Nigeria can no longer rely on borrowing, Finance Minister tells Senate

The Minister of Finance and Coordinating Minister for the Economy, Wale Edun, has disclosed that the country cannot rely on borrowing to fund the 2024 budget.

Edun stated this on Thursday when he appeared before the joint Senate Committee interrogating the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper chaired by Senator Sani Musa.

The finance minister told the joint panel that the best way Nigeria can fund its annual budgets is to spend more money on infrastructure.

“We have an existing borrowing profile. Our direction of tariff is to reduce the quantum of borrowing or intercepting deficit financing in the 2024 budget,” he said.

“Clearly the environment that we have now, internationally as well as nationally we are in no position to rely on borrowing.

“They are in the process, sacrificing that immediate goal for compacting their economies, or at least contracting the money supplies and pushing up the interest rates and of course high-interest rates and investments don’t go together.

“What is left for us to access those funds are expensive so it is the last thing that we must rely on. As we know we have all the figures and debt servicing and cushioning 98 per cent of government revenue.

“The last thing you can think of is to pike on more debts. The government needs to not just maintain its activity, it needs to spend more. If you look at government spending, if you look at the budget as a percentage of GDP, ours is one of the lowest being 10%, even Ghana is at 25%, and rich ones they are 50%.”

Accompanying the minister to the upper chamber is the Executive Chairman, Federal Inland Revenue Service (FIRS), Zacch Adedeji, and the Director General of the Debt Management Office, Patience Oniha.