FG Makes U-Turn After N33 trn Debt

By Fola James

The Minister of Finance and Budget, Zainab Ahmed says the federal government is planning to reduce borrowing after the nation’s total debt stocks hit all time high of N33 trillion.

’The government is now working to reduce its debt-service burden by increasing revenue, restructuring its debt portfolio through the conversion of expensive short-term notes into longer tenors, and also reducing its overall borrowing,’ Ahmed said in Abuja, on Friday, after disclosing government’s plan to raise $3 billion Eurobond to fund the 2023 Budget.

The bond will be raised next week as part of the overall $6 billion the Buhari administration planned to borrow to augment next year’s budget.

The nation’s external and internal debt stock has hit over N33 trillion since the Buhari’s administration swept to power in 2015, as worry continues to grow that the debt will soon become unsustainable.

Last week, the Chairman, Senate committee on Finance, Solomon Adeola, and his counterpart in the local and foreign loans panel, Clifford Ordia, said the red chamber was determined to reduce the borrowing drastically.

As a way out of the federal government’s cash squeeze, Adeola said effort will be challenged to generating more revenue into the government coffers.

According to him “It is the collective position of both the executive and the legislature that borrowing foreign loans to fund our budget deficit is not healthy for our economy.

“That is why we are engaging the major revenue generating agencies with a view to seeing how we can make them to improve on the revenue they are bringing to the federation account so as to reduce borrowing,”

The Vice Chairman of the Senate Committee on Customs and Excise, Senator Francis Fadahunsi, also advised the federal government to look inward to raise fund, rather than resorting to borrowing. What the government needs to do, the retired customs officer said last week, is to give revenue agencies such as the Nigerian Customs Service, NCS and others the marching order to generate more funds into the federation account.

As part of efforts to block incessant borrowing, the retired customs officer said revenue holes must be plugged.

Fadhunsi said, “The Senate would not encourage more borrowing, the Federal Government should look inward.

“All heads of revenue-generating agencies of government must be given a marching order to meet realisable targets or risk being removed from office.

“As soon as we resume, I will propose that the Senate Committee on Customs and Excise should audit the transfer of containers to bonded warehouses to know how many containers are involved.

We will look for serious retired customs officers and seasoned auditors to look at the duties that are supposed to be paid and what was actually paid.

“Nigerians will now know that we shouldn’t have borrowed money in the first instance to fund the budget if the customs is actually performing,” he said.

Nigeria’s debt rose significantly by N20 trillion, from N12 trillion when President Buhari took power to over N33 trillion as at January this year, according to figures obtained from the Debt Management Office, DMO.