Wednesday, 12 July 2017

Nigeria: N19 Trillion Debt - We Can No Longer Borrow - Govt

By Jonathan Nda- Isaiah, Solomon Ayado, Kayode Tokede and Bukola Idowu
With a debt profile of N19 trillion, the federal government hinted yesterday that Nigeria cannot afford to borrow anymore.
The Minister of Finance, Kemi Adeosun, who disclosed this at the quarterly Presidential Business Forum held at the presidential villa noted that the country's budget is significantly lower when attached to the GDP, which is currently at 6 per cent.
She pointed out that the GDP is lower than those of all Nigeria's peers and that it is the lowest in Sub Saharan Africa and one of the lowest in the world.
The minister lamented that Nigeria's budget size is too small, which means government can only pay salaries in some cases, even as it does not have money to deliver essential services.
Nigeria's total debt presently stands at N19.159 trillion as at March 31, 2017 and the Minister of Finance yesterday also stated that the country can no longer borrow.
Noting that there simply isn't enough money in government to do what government wants to do, the minister contended that even if the federal government plugs all the stealing and all the waste, the budget size will not be big enough.
She added that because people are not paying enough in terms of tax, the government is not collecting enough in terms of tax.
She noted that statistics peg Nigeria's tax to GDP at 6 per cent, Sub Saharan Africa average 17%, Asia 26%, while most of the emerging market and the advanced countries are at 30-35 per cent.
She said, "Our budget size is too small and what does that mean? It means we can pretty much pay salaries but we cannot deliver essential services. We don't have enough money on government to do what we should do.
"I know you all will say that is because people are stealing money, wasting money. I'm saying even if you plug all the stealing and all the waste our budget size is not big enough and that is because we are not paying enough tax or we are not collecting enough in terms of tax.
"It is interesting if you look at the statistics; there is no poor country that has a high tax to GDP ratio and there is no rich country with a lower one and so, if we want to move with the prosperous countries, we have to do what they do.
"We will not achieve prosperity for Nigeria if we continue on the tax to GDP ratio that is in the peer group of Afghanistan. I'm sure none of us aspire for Nigeria to become like Afghanistan. We are trying to benchmark ourselves against more develop countries and we must have to address these problems in a more fundamental sense".

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