MTEF-FSP: FG turns to internal revenue, frowns at reliance on external borrowings

The Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, declared, Thursday, Nigeria  can no longer rely on borrowing to fund the 2023 national budget.

The minister, who stated this when making presentation before the joint  Senate  Committee scrutinising the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper, (MTEF-FSP) said the nation must make necessary sacrifices to generate adequate revenues to reduce its current high deficit financing.

Edun briefed the joint panel in company with the Executive Chairman Federal Inland Revenue Service (FIRS), Mr. Zacch Adedeji and the Director General of the Debt Management Office, Ms. Patience Oniha, before the lawmakers called for a closed session.

The minister maintained that the best way Nigeria could fund its annual budgets was to spend more money on infrastructure that could generate revenues.

He also said the advanced countries have increased their interest rates because they wanted to bring down inflation rate to stabilize their economy.

He said accessing foreign loans would therefore be very expensive for a developing country to cope with.

“Clearly the environment that we have now, internationally as well as nationally, we are in no position to rely on borrowing. 

“We have an existing borrowing profile. Our direction of tariff is to reduce the quantum of borrowing or intercepting deficit financing in the 2024 budget. 

“Simply put, internationally there is focus among rich countries on bringing down the inflation rate to stabilize the economies and give them opportunity for investment growth.

“What is left for us to access those funds are expensive so it is the last thing that we must rely on.

“The last thing you can think of is to pile on more debts. Government needs to not just maintain its activity, it needs to spend more if you look at government spending,  if you look at the budget as a percentage of GDP,  ours is one of the lowest being  10%, even Ghana  is at 25%, rich ones they are 50%,” he said.

Earlier, the Chairman of the joint committee scrutinising the MTEF-FSP document, Senator Sani Musa (APC Niger East ), expressed the fears that the revenue projections of the ministries, departments and agencies of the federal government that had so far appeared before his panel were a far cry to what the federal government was proposing as income in the 2024 fiscal year.

“Currently there are lots of leakages in the use of government resources. A lot of funds being generated as revenues by most MDAs are not being remitted as at when due. Some even remits funds a year after they collected the money.

“The Office of the Accountant General of the Federation should look properly in that direction,” he said.


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