Nigerian Govt Not Asking For Debt Relief, Restructuring, Says Finance Minister

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President Buhari
  • Govt Extends N5.03trn, $4bn Financial Support To States In 7 Years

Nigeria’s Minister of Finance, Mrs. Zainab Shamsuna Ahmed has said that demanding debt relief, restructuring or rescheduling of debts is not on the cards as a way out of the nation’s rising debt profile, declaring that the debt strategy put in by the administration is effective, up and running.

Besides, she observed that the nation’s debt to GDP profile put at 33% is sustainable, adding that the administration’s borrowing is practical.

The minister who outlined the achievements of her ministry during the 6th edition of the President Muhammadu Buhari Administration’s Scorecard, Thursday in Abuja, insists that the debt strategy religiously implemented by the board headed Vice President Yemi Osinbajo,   is working according to projections in addressing the nation’s loans, both in the short and medium term.

While admitting that the country faced some revenue challenges due to the underperforming of the oil sector due to criminality, she nonetheless allayed fears that the country is broke, pointing out that the administration has so far not defaulted in debt services, domestic or external.

“We don’t have to restructure because we have a debt strategy that could be followed closely. We provide in our budget provision for debt service. It is taken as a first-line charge so we have not defaulted on any loan external or local. And we have projections for reaching out to loans in the short and medium terms. This is the medium plan and very frequently it is revised.

” So we are comfortable in terms of our ability to pay our debts..we have no fears about that happening. So we are not going for any debt relief and we are not going for any debt restructuring.

“Nigeria is not broke. We continue to generate revenue on a monthly basis and this revenue are distributed at FAAC. Again, to continue with the tradition of transparency we actually disclosed how much is distributed on a monthly basis to the various tiers of government.

“In my presentation, I said we have witnessed a significant increase in non-oil revenue. While oil revenue is underperforming because of criminality, recently NNPC has reported that has been curtailed and we are already beginning to see a pickup in the production volumes which is that more revenue has begun to come to the Federation.

“But it is not enough to cover all we need and that is why in the budget we have to access in the budget.

Our borrowings have been practical. They are sustainable; they are guarded by debt management strategies. There is a debt management board that is chaired by the Vice President, the Minister of Justice, Finance and other ministers as well as the debt management office. Debt management is being followed religiously.

“We have a lot of demand on the government both state and federal to provide service. But our consumption level is low so we have to keep working to find out how we can incentivize and enhance the business environment so that small business enterprises that should be the largest employers of labour and should be the largest contributors to GDP continue to grow.

“It is for that reason we have reduced income taxes for the smallest businesses. And also reduce the taxes for medium businesses from 30% to 22% so that they will trade to revenues in their businesses to stabilize their businesses, especially during Covid we did not want them to disengaging people but to stabilise and to grow.”

The minister maintained that no previous administration has demonstrated greater support for state governments than the Buhari administration despite the headwinds she said pummeled the nation’s economy, including a double recession, global pandemic and general global economic meltdown.

Reeling out figures, she said the Buhari government has in the last 7 years extended financial support to state governments to the tune of N5.03 trillion and other $ 4 billion dollars, far and above what previous administrations have done.

“With respect to sub-national governments, the FMFBNP goes over and statutory role to provide financial support to States:

“A total of N5.03 trillion plus an additional US$3.4 billion has been released to states by the Federal Government over the life of this administration.”

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