The Minister of Finance, Mrs. Zainab Ahmed, has assured that Nigeria’s borrowing still remains healthy at 19 per cent to the Gross Domestic Product (GDP); which is low compared to Ghana, Brazil, South Africa, Egypt and Angola.
In a statement, her Special Adviser on Media and Communication, Mr. Paul Ella Abechi, also said the minister reiterated the Federal Government’s promise that fuel subsidy would not be removed at this time.
The International Monetary Fund (IMF) had advised Nigeria at the just concluded Spring Meetings in Washington DC, USA, to end the subsidy regime and free up more resources for educational projects.
The minister noted that subsidy was no longer paid to petroleum marketers as “NNPC is the sole importer of petroleum products, thus deducts costs of operations before remitting the surpluses to the government.
“It is more cost-effective, it is cheaper and what is being done now is easier to monitor what transpired,” she added.
On borrowing, she said, “We are still at 19 per cent to GDP; our borrowing is still low. What is allowed by our Fiscal Responsibility Act is the maximum of 25 per cent of our GDP compared to other countries like Ghana, Egypt, South Africa, Angola and Brazil, and we are the lowest in terms of borrowing.”
The minister, however, acknowledged the challenge of revenue generation in Nigeria, saying, “What we have is revenue problem, and when revenue performs at the aggregate rate of 55 per cent, it hinders the ability to operate in our budget. So it hinders our ability to service all categories of expenditure, including salaries, allowances, capitals, as well as debts.”
Meanwhile, she assured that the ministry was not resting on its oars in regards to boosting the nation’s revenue.
The minister also maintained that there was no intention of subsidy removal as reported in some sections of the media as government had not come up with any plan in that direction.