Zainab Ahmed, minister of finance, says she does not agree
with those who say Nigeria has a debt problem, stating that the country only
has a revenue problem.
Speaking at the Nigeria International Economic Partnership
Forum in New York, Ahmed said Nigeria has set a debt-to-GDP ceiling at 40
percent, which the country is yet to exceed.
At the same event, Akinwumi Adesina, president of the Africa
Development Bank. (AfDB) had said Nigeria needs help to tackle its debt burden,
which has now crossed the $100 billion mark.
Ahmed, who spoke after Adesina, said the problem is not debt, but revenue — stating that Nigeria’s revenue generation is low right now.
“Everywhere we go, we
hear this issue of the debt of Nigeria is a problem and is not sustainable. The
debt and debt financing that we do in Nigeria is following a designed debt
management strategy,” she said.
“As of today, and this has been reported by two previous
speakers, Nigeria’s public debt stock is $100.1 billion or N14.6 trillion,
which represents 24 percent of the nominal GDP. This is below the 40% threshold
that we have set up for ourselves.
“Nigeria operates a four year rolling medium term strategy
which guides the borrowing strategy of the federal government. And we have
specific indices that we closely monitor. The public debt that we set is 40
percent and we are at 24 percent.”
The minister further explained that “the portfolio
composition between external and domestic is set at 30:70. So 70 percent of our
debt is domestic and 30 percent is external. We also have a mix of long to
short term financing and the mix is 75 to 25 and we are very well within this
threshold”.
“So the medium term strategu show that the Nigerian debt
portfolio is still operating within sustainable limits.”
‘WE HAVE A REVENUE
PROBLEM’
She however, added that while debt, in her opinion, is still
sustainable, there is a revenue problem.
“We do have a revenue problem and this revenue problem,
we’re tackling using the instrument of the strategic revenue initiative, the
revenue challenges we have we have been addressing in a systematic manner,” she
added.
“We have had a very
significant impact in revenue performance based on the issues in the oil
sector, and it is being addressed by the security agencies.
“There are some ineffective tax incentives that are currently
in process of being review, so some that have reached maturity will not be
renewed, there might be some new ones that are being introduced, but we’re
trying to make sure that we’re getting value for the investments that we have
provided.
She said the Strategic Revenue Growth Initiatives (SRGI) is
designed around three thematic areas:
achieve sustainability, identify new and enhance existing revenue stream
and achieve collision within the revenue ecosystem — alignment between our
people and our truths.
Ahmed said the government has taken on some innovative
approaches to financing infrastruction, giving an example of road
infrastructure for tax rebate.
She called on the investors to come partner with Nigeria and
reap the rewards of investing in Africa’s largest economy.
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