Nigeria’s borrowing put at 19 percent to the Gross Domestic Product, GDP, is low compared to such countries as Ghana, Brazil, South Africa, Egypt and Angola, Mrs Zainab Ahmed, the Minister of Finance has said.
Ahmed in a statement by her Special Adviser, Media, Mr. Paul Abechi, in Abuja, Tuesday, was obviously reacting to concerns by critics that the current administration was mounting debts.
“In the borrowing, we are still at 19 per cent to GDP. Our borrowing is still low. What is allowed by our Fiscal Responsibility Act is the maximum of 25 per cent of our GDP compared to countries; Ghana, Egypt, South Africa, Angola and Brazil and we are the lowest in terms of borrowing,” she was quoted as saying.
Acknowledging the challenge of revenue generation by the country, the minister said: “What we have is revenue problem and when revenue performs at the aggregate rate of 55 percent, it hinders the ability to operate our budget.
“So it hinders our ability to service all categories of expenditures including salaries, allowances, capitals as well as debts.”
Consequently, Mrs. Ahmed said the ministry was paying particular attention to enhancing revenue and collection capacities.
Clarifying the vexed issue of subsidy, the minister said that there was a difference between the current subsidy regime and what it was under the past administration.
According to her, in the past, subsidy was paid to oil marketers in a manner that lacked transparency, as against the new regime in which NNPC is the sole importer of petroleum products.
She said: ”So when they import, it is the cost of business and deduct that cost before they remit the little money to the federation account. So that is completely different.
“It is more cost effective, it is cheaper and what is being done now is easier to monitor what transpired.”
She also insisted that there was no immediate plan to remove subsidy from petroleum products in the country, as no alternative arrangement had been found.
“We are not there yet and we discuss this periodically under the Economic Management Team, but we have not found a formula that works for Nigeria and you know Nigeria is unique because what works in Ghana may not work in here.
”So it is still work in progress and so there is no intention to remove fuel subsidy at this time,” Ahmed said.
