The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, on Wednesday said that fears being expressed over Nigeria’s debt portfolio were not necessary.
According to the minister, debt portfolio should not be a thing to worry about because despite the current foreign and domestic debt stock, Nigeria “does not have a debt crisis”.
The minister’s position came on the heels of a report by the Debt Management Office (DMO), which showed that the total public debt portfolio from Nigeria’s domestic and external borrowings stood at N25.7 trillion (about $83.88 billion) as at June 30, 2019.
However, Ahmed, who spoke on Wednesday at the National Assembly hearing on the N10.33 trillion 2020 Budget said, “We have heard repeatedly that Nigeria is inching towards a debt crisis and we have consistently said that Nigeria does not have a debt crisis. Our total borrowing rate is just under 50 per cent of our GDP, while the multilateral institutions project for a country to borrow from 50 to 55 per cent of the Gross Domestic Product (GDP).
“What we have, is a revenue problem. Our revenue performance by half year is 58 per cent. So, we have designed this Strategic Revenue Growth Initiative early this year, which has three thematic areas.”
She said that one of the objectives aimed at achieving sustainability in revenue generation; and the second aimed at identifying enhanced enforcement alongside existing revenue streams; and the third is to achieve cohesion “of our people and tools.”
“There is also the need for us to ensure that we have the right legal enablers and other enablers that will enhance revenue performance.
Nigeria as a country must mobilise significant domestic resources to be able to make necessary investment in human capital as well as in physical infrastructure,” she added.
She had disclosed in August when Nigeria’s debt stock was at N24.9 trillion against expert opinions that Nigeria was not in a debt crisis but rather having a revenue generation problem. She said the Federal Government hoped to raise its revenue performance from 55% that was attained in 2018 to 85% in the next four years.
According to a World Bank research an Emerging economy is in safe zone if its debt to GDP ratio is 50% or less.