Govt Not Borrowing Blindly, Debt Guided By Law—Ahmed

Nigeria’s Minister of Finance, Budget and National Planning, Zainab Ahmed, has responded to recent criticism about borrowing under her watch.

Ahmed said on Monday at the ongoing 27th National Economic Summit in Abuja that the President Muhammadu Buhari led administration is not borrowing blindly.

President Buhari and the minister were recently under attack for the country’s rising debt levels which the Debt Management Office said is N87.2trn or $33.1bn as of March 2021.

In the N16.39trn 2022 budget appropriation presented by the president, the deficit was put at N6.26trn and it’s to be financed through borrowing of N5.01 trn.

Nigeria’s debt service to GDP ratio had hit 73 per cent based on figures released by the Finance Minister earlier this month.

Ahmed said at the summit that, “We tried to borrow more than planned because of the Covid-19. We are very uncomfortable at the fact that we have borrowed at the quantum exceeding the threshold that is outlined by the Fiscal Responsibility Act (2007).

“But we have made sure that we have planned over the next few years that the borrowing is scaled down and also that we are able to borrow at levels that we can actually repay the debt service obligation.

“So, our borrowing is not just done blindly, it is guided by laws. It is guided by a medium term debt plan we have on board for the Debt Management Office that is chaired by his excellency the Vice President.

The minister also revealed that the criticism by Nigerians and political groups make her uncomfortable.

She said, “So, we actually plan these things. I feel discomfort from the publicity that we are borrowing too much. We are going to leave debts that the future generation has to take part in.

“I think if we can move towards, what are they doing with the money that they are borrowing? We do need to build this critical infrastructure now and for us to have a chance to attain the minimum 7 per cent growth that his excellency the president has set. That is the growth that we have in the Medium Term 2025 growth rate.”

She insisted that borrowing under her watch is being planned and not done ‘blindly.’