By David Agba Abuja–
Th e Minister of Finance, Mrs. Kemi Adeosun, has reassured that President Muhammadu Buhari would not saddle Nigeria’s future generation with unserviceable debts.
Adeosun stated this in an article entitled, ‘Th e Debt Debate: Deconstructing the Debt Story’, in which she explained the debt history, the short-term strategy and the medium to long-term outlook for the economy.
Th e Minister stated that anyone who thought that the economy the administration inherited in 2015 was in need of minor adjustment was deluded.
Th e minister stated, “Oil prices had plunged from a height of over $120 to a low of $28 per barrel, yet the country had foreign exchange reserves of $28.34bn (having declined by $16bn in the two years to June 2015 from a high of $44.95bn).
“Despite just 10 per cent of the budget allocated to capital expenditure, debt had (in a period of unprecedented oil earnings), inexplicably risen from N7.9tn in June 2013 to N12.1tn in June 2015.
Depending on the candour of the commentator, the outlook was at best challenging, and at worst, bleak.
” She stated that an expansionary fi scal policy was adopted with an enlarged budget in order to deliver a fundamental structural change to the economy to reduce the country’s exposure to crude oil.
“Th rough the implementation of the Efficiency Unit and enrolment of Ministries, Departments and Agencies on the Integrated Payroll and Personnel Information System, we have successfully saved N206bn in payroll costs using technology to drive the cleansing process, with the removal of 54,000 fraudulent or erroneous entries.
Th is was attained without the negative social impact of retrenchment.
” Adeosun said.
She added that the economic modelling team correctly forecast that in the short-term, there would be acceleration in the accumulation of debt and an increase in debt servicing costs.
Th e minister, however, said this would be ameliorated by correcting the low tax to Gross Domestic Product ratio through revenue mobilisation, releasing funds to sustain investment in capital and repaying the debt