As the global economy continues to feel the effects of the coronavirus, the federal government has disclosed its plans to suspend the proposed borrowing $22.7 billion from external sources by President Muhammadu Buhari.
Minister of Finance, Budget, and National Planning, Mrs Zainab Ahmed, made this announcement on Monday during this year’s International Conference on the Nigerian Commodities Market, organised by the Securities and Exchange Commission (SEC) in Abuja.
The minister stated that the government would not go ahead with the borrowing programme even if it fully secures the approval of the National Assembly due to present economic realities.
Recall that the Senate has passed the loan request, but the House of Representatives is yet to give President Buhari the authority to go ahead with the borrowing.
At the seminar yesterday, Mrs Ahmed explained that the decision to halt the development was taken because market indices do not support external borrowings at the moment.
“The parliament is still doing its work on the borrowing plan. One arm of the parliament has completed theirs and the other arm is still working and it is a process that is controlled by the parliament itself, so we are waiting.
“However, we are not going out immediately because the market indication is not in favour of external borrowing at this time. Even if we get approval, we will defer it and watch the market and go out only when the timing is right,” the Minister said.
She also said that current reality in the world impacted by the coronavirus and also the Saudi-Russia oil price war has brought the federal government face to face with the need to diversify more into the non-oil sector of the economy.
“Several national plans, programmes and projects have been directed at diversifying the production and revenue structures of the economy,” she said.
She stressed that there was need to do more to boost production and expand the country’s exports base which is less vulnerable to external shocks and provides more opportunities to the country’s teeming population.
According to her, the federal government plans to prioritise expenditure in favour of major capital expenditures that would have greater impact, which would create job and visibility and also enhance the ease of doing business in the country.
The Minister further noted that expenditures that are not critical must be deferred to a later date when things become more normal.
The plan by President Muhammadu Buhari to borrow the $22.7 billion to support the country’s budget deficits had been met with a lot of criticisms and opposition from Nigerians, who opined that it would only worsen the country’s debt portfolio.
