Nigeria government can only pay workers' salaries and can't borrow anymore says Adeosun
Since the country's possibility of executing major infrastructure in 2017 is under doubt, getting out of recession in Q3 2017 is now questionable.
The country’s Minister of Finance, Mrs Kemi Adeosun disclosed this during the Quarterly Presidential Business Forum held on Tuesday, July 11, 2017, at Aso Rock Presidential Villa in Abuja.
Adeosun also stated that going further the government could only pay salaries of workers and must curtail its borrowing spree.
"The problem is that we have been relying on oil and oil gave us a big budget size. It is one of our resources and as you know, it's only 10% of our GDP. So, the rest of our economy 90% has to contribute to our revenue.
"So, what are we trying to do? We need to mobilise additional revenue to fund our budget. We have got to get our budget bigger and to do that we cannot borrow any more. We have to generate more revenue, we have to plug the leakages; we have to improve tax collection so that we can manage our borrowing."
Nigeria is in its first recession in 25 years and planned the 2017 budget as the template for economic recovery. Though the spending plan is lined with a huge deficit, its revenue proposals are currently under threat as the country is likely to be included in the OPEC output cut deal.
The minister also raised concerned about debt accumulation by the country, which calls to question government plan to borrow about $2 billion from the foreign debt market.
‘Nigeria can’t endeavour to continue going into the debt markets to raise needed fund. Hence, the government is considering other sources of revenue.’
In the planned borrowing plan of the government for 2017, Nigeria had hoped to raise about 2.06 trillion ($7.7 billion) from both local and international debt market especially the Euro bond market.
Nigeria had approached the World Bank and the African Development Bank for the loan of about $2 billion. The fund's release has been stalled for over a year now due to the country’s refusal to put in place key fiscal reforms set by the international lenders.
With the possibility of executing major infrastructural items in the 2017 budget being put under doubt, the country’s hope of getting out of recession in Q3 2017 may now be questionable.
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