NIGERIA’S finance minister Zainab Ahmed has dismissed recent claims by Governor Godwin Obaseki of Edo State that the federal government printed N60bn ($157m) to help fund the 2021 budget saying such allegations were not only untrue but unfortunate.
Last week, Governor Godwin Obaseki of Edo State reported that Nigeria was in huge financial trouble, alleging that the federal government printed N60bn in March to help fund its federal allocation to the states. He also expressed concern over the country’s increased borrowing, saying it was wrong to continue borrowing without a tangible plan for debt repayment.
Acknowledging that Nigeria is sitting in a ticking time-bomb, Patience Oniha, the director-general of Nigeria’s Debt Management Office (DMO), blamed the problem on the Covid-19 pandemic. She said the rate of borrowing had started to come down until coronavirus forced Nigeria, like many other nations, to increase its borrowing in order to buoy the economy.
However, dismissing the printing claims as totally false, Ms Ahmed allayed concerns about the nation’s current debt profile. She added that Nigeria’s debt which totals about 23% of gross domestic product (GDP), falls within sustainable limits despite the concerns about the country’s rising debt profile.
Notwithstanding her assurance, the Lagos Chamber of Commerce and Industry (LCCI) expressed concerns over the sustainability of the federal government’s Medium Term Debt Management Strategy (MTDMS) for 2020 to 2023. However, Ms Ahmed insisted that the money recently shared among the states, which Governor Obaseki was referring to, was internally generated revenue, which was even made public through the finance ministry’s website.
Ms Ahmed said: “The issue that was raised by the Edo State governor for me is very, very sad because it is not a fact. What we distribute at the Federation Account Allocation Committee (Faac) is revenue that is generated and in fact distribution revenue is public information.
“We publish revenue generated by the Federal Inland Revenue Service (Firs), the
and we distribute it via Faac, so, it is not true to say we printed money to distribute at Faac. On the issue of the borrowing, the Nigerian debt is still within sustainable limits.”
She, however, stressed the need for the federal government to improve its revenue-generating system for optimal result. According to the minister, if government revenue increased, the need to borrow would reduce.
Ms Ahmed added: “What we need to do as I have said several times is to improve our revenue to enhance our capacity to service not only our debt but to service the needs of running the government on a day-to-day basis. So our debt currently at about 23% to GDP is at a very sustainable level if you look at all the reports that you see from multilateral institutions.”
Governor Obaseki, said, however: “While we do not want to join issues with the Federal Ministry of Finance, we believe it is our duty to offer useful advice for the benefit of our country. The minister of finance, Mrs Zainab Ahmed should rally Nigerians to stem the obvious fiscal slide facing our country.”
He added that rather than play the ostrich, the federal government should take urgent steps to end the current monetary rascality so as to prevent the prevailing economic challenge from degenerating further. Governor Obaseki said: “We believe it is imperative to approach the Nigerian project with all sense of responsibility and commitment and not play to the gallery because ultimately, time shall be the judge of us all.”