The Federal Government yesterday defended its decision to seek more foreign loans, saying they are a component of the 2024 Appropriation Act.
It explained that apart from using the loans to partly fund N9.7 trillion deficit in the budget, they would be used to further enhance infrastructure and help the poorest and most vulnerable Nigerians.
Minister of Finance and Coordinating Minister of the Economy Wale Edun; his Budget and Economic Planning counterpart, Atiku Bagudu and Federal Inland Revenue Service (FIRS) Chairman, Zacch Adedeji, gave the reasons at an interactive session on 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for revenue generating agencies at the National Assembly in Abuja.
The session was organised by the National Assembly Joint Committees on Finance, National Planning, and Economic Affairs.
President Bola Tinubu had in two letters to the National Assembly requested a nod to borrow $2.209 billion.
The explanation by Edun, Bagudu, and Adedeji, who are members of the Economic Team of the President, followed a question asked by Senator Adamu Aliero on why the government needed more loans when its revenue agencies had surpassed their revenue targets for this year.
Adedeji, who the question was directed at, said: “The fact that we meet revenue targets, that does not mean we should not go and borrow and the reason is simple. The budget we have has both a borrowing component and an internally generated revenue component.
“So, it is a total package. Our borrowing target is there in the budget as approved by the National Assembly.”
Edun and Bagudu thereafter stepped in, saying that borrowing was still needed for proper funding of the budget, despite excess revenues made by some of the revenue agencies.
Bagudu said: “Despite surpassing revenue targets by some of the revenue generating agencies, the government still needs to borrow for proper funding of the budget, particularly in the area of deficit and provision for the poorest and most vulnerable.
“We have a long-term development agenda 2050 aiming at GDP (Gross Domestic Product) per capital of $33,000.”
Edun also expressed optimism about the country’s economic future, citing a strategic budget for 2025.
According to him, Nigeria has changed fundamentally under President Tinubu’s leadership
The minister emphasised the importance of market pricing of petroleum products and foreign exchange, which, he said, had sent the right signals to investors.
“Just today (yesterday), the National Bureau of Statistics (NBS) announced that GDP growth in the third quarter was 3.46 percent, let’s say, for the sake of round numbers, 3.5 percent.
“That means that the GDP per capital is increasing. The economy is moving in the right direction.
“Inflation is too high and that is why interventions are being made particularly for the most vulnerable.
“Let me just summarise the change by saying that in Nigeria, for the first time in four decades, we have market prices of petroleum products being determined by market forces because of the local refinery which is not only producing Premium Motor Spirit (petrol), but also diesel and Jet A1 (Aviation fuel). It is also producing raw materials for industries and agriculture.
“In addition, we have market pricing of foreign exchange.
“For the first time in 40 years, no Nigerian can wake up and think that his way to fortune and the quickest path he can take to getting rich is by getting an allocation of foreign exchange from the Central Bank of Nigeria (CBN).
“Likewise, no Nigerian can wake up and feel that his quickest path to riches is to look for a subsidised allocation from the Nigerian National Petroleum Corporation Limited (NNPCL) and make money.”
