The minister of finance and coordinating minister for the economy, Wale Edun, has warned that Nigeria cannot afford to borrow more money to finance its budget, as it is already facing a high debt burden and a challenging economic environment.
Edun made this statement on Thursday at a senate joint committee meeting on the 2024-2026 medium-term expenditure framework (MTEF) and fiscal strategy paper (FSP), chaired by Senator Sani Musa from Niger east.
He said Nigeria’s budget spending as a percentage of GDP is one of the lowest in the world, at 10 percent, compared to 25 percent for Ghana and 50 percent for some rich countries.
“Government needs to not just maintain its activity, it needs to spend more,” he said.
However, he added that borrowing more money is not a viable option, as the available sources of funds are expensive and unsustainable.
“Clearly the environment that we have now, internationally as well as nationally, we are in no position to rely on borrowing,” he said.
“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.
“What is left for us to access those funds are expensive so it is the last thing that we must rely on.
“The last thing you can think of is to pile on more debts.”
The chairman of the committee, Senator Musa, expressed his concern over the revenue leakages in the economy, caused by the delay or non-remittance of funds by some MDAs.
He said the office of the accountant-general of the federation should look into this issue and ensure that all revenues are properly accounted for and remitted as at when due.
He also said that the committee discovered a huge shortfall in revenue from customs, due to the waivers granted by the government.