Minister of Finance, Kemi Adeosun has stated that Nigeria is not enmeshed in a huge amount of debt has been insinuated by some people.
Adeosun, who stated this when she featured on Channels TV’s Sunrise Daily said: “We had to plan for a bigger budget to create some headroom for capital projects that would in turn drive growth.
“As the economy begins to recover, and revenues begin to come in, the pace at which we borrow will come down,” she explained.
The minister further stated that Nigeria’s borrowing is actually very low relative to the size of its Gross Domestic Product (GDP) and its one of the areas we’re doing very well.
“While Nigeria has a debt GDP of 17%, the threshold for a developing economy is 40%. What we are trying to do is grow the debt and link it to capital projects because that’s what is critical.
“Our plan isn’t to borrow for recurrent expenditure, but to borrow and channel it into assets that will keep the economy going.”
She also observed that the current administration inherited a lot of treasury bills.
“After every 90 days those bills mature and paying interest on them is not sustainable.
“Out of the $5.5b loan request, $2.5b is for the 2017 budget while $3b is simply to refinance money that we already owe.”