Nigeria Would Not Have Exited Recession Without Borrowing – FG

Federal Government of Nigeria has said the country wouldn’t have exited recession without borrowing.

Gatekeepers News reports that the Minister of Finance, Budget, and National Planning, Zainab Ahmed has insisted that the recent borrowings of the Federal Government were instrumental to the country’s exit from recessions.

The Finance Minister said this during the Public Presentation and Breakdown of the 2022 Appropriation on Friday.

While defending the recent borrowings by the Federal Government, Ahmed said “Having witnessed two consecutive recessions, we have had to spend our way out of the recession which contributed significantly to the growth of our public debts.”

This comes a day after President Muhammadu Buhari presented the Appropriation Bill to the National Assembly.

The Minister added, “It is unlikely that our recovery from these recessions would have been as fast without the sustained government expenditure funded partly by debt.”

She earlier announced that Nigeria will fund its 2022 budget deficit, pegged at N6.258 trillion, through fresh borrowings.

This announcement generated a lot of controversy from critics and members of the opposition parties.

Following Buhari’s request for approval to borrow $4 billion and €710 million to fund the deficit in the 2021 budget, the Peoples Democratic Party (PDP) said, “Our party holds it as an act of wickedness that individuals who know that they will be leaving office in less than two years will be accumulating debts instead of seeking ways to reduce the liability they have brought upon our nation.”

Meanwhile, the nation’s Minister of Finance, Budget, and National Planning earlier argued that the borrowings are within “sustainable limits.”

She explained that borrowings have helped the government in providing infrastructure to boost the economy.

Ahmed maintained that “Borrowings are essential to enable us to deploy necessary capital expenditure and invest in human capital development.”

She added that the government had to resort to borrowing because of the country’s rising levels of insecurity.

Ahmed said, “To compound matters, the country has technically been at war, with the pervasive security challenges across the nation.

“This has necessitated massive expenditures on security equipment and operations, contributing to the fiscal deficit; Defence and Security sector accounts for 22% of the 2022 budget!”

The Minister further allayed fears over Nigeria’s debts, maintaining that the “debt level of the Federal Government is still within sustainable limits.”