We Borrow a Lot of Money Because of Insecurity, Low Revenue, Nigerian Government Says
- Nigeria is neck-deep into debt because of the raging insecurity in the country, so says the minister of Finance, Budget and National Planning, Zainab Ahmed
- She also said that low earnings and inability to meet the country's OPEC quota is also to blame for why Nigeria borrows more money
- Ahmed admitted that Nigeria's debt profile is high but said it is also sustainable but faces the challenge of servicing because the country is 'technically at war'
The Minister of Finance, Budget and National Planning, Zainab Ahmed has said that Nigeria borrows more money because of insecurity and low revenue.
She also said the country has been unable to meet the Organisation of Exporting Countries (OPEC) quota for the production of oil in the last few years.
Source: UGC
She said this on Wednesday, January 7, 2022, during the public presentation of the 2022 budget proposal and breakdown in Abuja.
Low debt to GDP ratio
According to the Guardian, the minister insisted that Nigeria’s debt to GPD ratio is low compared to that of some countries in Africa. As of November 2021, the ratio stands at 76 per cent. She said Nigeria’s most pressing need is not debt sustainability but revenue.
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Ahmed also said the reason the nation imposed excise duty of N10 per litre on carbonated drinks is to reduce health risks associated with consuming them.
She admitted that Nigeria’s debt stock is worrisome and said that Nigeria’s budget deficit to GDP, which is at -4.3 per as of November last year and the debt ratio of 30 per cent as of September 2021 is the lowest in Africa.
Low VAT rate, lowest in Africa
According to her, the tax rates and compliance percentages are very high in other countries.
She also said Nigeria’s Value Added Tax (VAT) is the lowest in Africa at 7.5 per cent.
She said"
“To compound matters, the country has technically been at war, with the pervasive security challenges across the nation. This has necessitated massive expenditure on security equipment and operations, contributing to the fiscal deficit. The Defence and Security sector accounts for 22 per cent of the 2021 budget.”
Nigeria's debt has grown threefold in seven years, activist says
Legit.ng has also reported that Rights activist, Chidi Odinkalu, has said Nigeria’s debt profile has increased three times in the last seven years, that is since Muhammadu Buhari mounted the saddle as Nigeria’s president.
Odinkalu said this in a tweet but did not expatiate as he only provided an undated chat from the Nigeria Bureau of Statistics (NBS).
Odinkalu may not be an economist but available data from Debt Management Office (DMO) says Nigeria’s debt profile has soared to about N35.65 trillion recently because of increased borrowing by Buhari's government.
Source: Legit.ng
