Minister says FG will only borrow from lowest cost debt providers

chika ebuzor

March 4, 2016 6:44 AM

She said that the decision was for government to easily service the debts as high cost debts would be counter productive in view of the nation’s economic realities.

Minister of Finance-Kemi Adeosun.

The Minister of Finance, Mrs Kemi Adeosun, said the Federal Government would only borrow from the lowest cost debt providers to fund the deficit in the 2016 budget.

Adeosun said this on Thursday in Abuja while addressing the Senate Committee on Appropriation, chaired by Sen. Danjuma Goje.

"We know that there is a need, because of the budget deficit, to borrow but what I will like to assure you is that borrowing is going to be responsible as possible.

"What we have done is to approach the lowest cost debt providers first; we have secured loan with the China Exim bank at less than two per cent.

"We have secured loan facility with World Bank 1.5% concessioner loan with long moratorium period before we have to start repaying and at low interest rate,” she said.

The minister added that the ministry had made some projections around the nation’s revenue beyond the use of the sources of revenue which were oil proceeds, customs and taxes.

She said that to fund the 2016 budget, independently generated revenue would be quite significant in financing it.

"We believe that is one of the opportunities that the lower price has given us that we are now focusing on the non-oil revenue.

"We are aggressively looking at ministries, departments, agencies on board to understand what their true revenue base is and to know how much they are contributing to the wider economy.

"We have set in process in the ministry of finance a very rigorous framework of revenue management and to actually monitor revenue.

"We are beginning to roll those out into other agencies of government that collect revenue of any description,” she said.

chika ebuzor