Nigeria: Finance minister says Nigeria has to reduce borrowing
By Correspondent Chinyere Ogbonna – Nigeria’s Minister of Finance, Dr. Ngozi Okonjo Iweala has expressed concern over the nation’s debt profile which presently stands at $39.7 billion.
- Nigeria’s Minister of Finance Dr. Ngozi Okonjo-Iweala
In her maiden address to journalists, the Minister said that the country’s debt now stands at N5.2 trillion for domestic debt and $5.3 billion external debt.
Mrs. Okonjo-Iweala said, “Nigeria has $39.7 billion total debt stock which is 20 per cent of Gross Domestic Product. According to her the country is still in very good shape in terms of GDP, but should start worrying when national debt hits 60 per cent of GDP.
She however lamented that of the 20 per cent of GDP debt stock, 17.5 per cent of it is domestic debt and insisted that Nigeria would have to watch her domestic borrowing.
“Nigeria has to reduce borrowing but cannot stop borrowing immediately because it will be a shock to the system. The government has said it will put the trend on a down ward part on domestic debts because whether government likes it or not it is bound to respect the terms of the bonds it is holding and other financial commitments.” She said.
“We need to work harder. We need to maintain macro-economic stability. We need to manage our fiscal system in a more prudent manner. We can start with recurrent expenditure,” she told reporters.
“We need to change the budget process in this country. We can’t bring a budget and then have reservations that go back and forth. The executive has its responsibility and I hope the lawmakers will also take responsibility. By 2013 we will have a much saner budget process,” Okonjo-Iweala added.
Describing herself as a “debt hawk”, Dr. Iweala assured Nigerians that the country’s “external debt is extremely low and all are confessional with reasonable interest rate.”
Dr. Okonjo-Iweala told reporters that “There has been a lot of debate on fuel subsidies and we have all resolved that (removing it) is a good direction to go on. You have to leave it to us to decide when it is prudent to do so,”
The Minister noted that in order to help these businesses grow the economy and boost job creation, the state needs to improve infrastructure and remove barriers for investors.
“We need to look at infrastructure as an enabler for the economy. Power, roads, things that will help business, which will drive economic growth. We need to focus on current incomplete projects, not starting too many new ones.”
She also told journalists that the Minister of State for Finance Alhaji Lawan Yerima Ngama was working on 2011 budget with legislators to ensure that the country has a sound 2012 budget.
