By Bisola Adeyemo
The rising price of crude oil is good for Nigeria as it yields more revenue for the government as well as reduces the country’s rate of borrowing.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said this while addressing State House correspondents on the state of the economy under President Muhammadu Buhari in Abuja.
“The more revenue we realize out of the budget, the less we borrow. As we see the oil price rising and provides us more revenue, it provides us some reliefs. We will be able to reduce our borrowing so, it is a positive thing for us,” she said.
She also assured Nigerians that government has already made provision for COVID-19 vaccines in the 2021 budget.
While justifying Nigeria’s rate of borrowing, the minister said the country’s proportion of borrowing is not misplaced because it’s to develop infrastructure not to be left behind.
“There is a lot of sensitivity in Nigeria about the level of borrowing by the government and it is not misplaced. And I said earlier that the level of borrowing is not unreasonable, it is not high. The problem we have is that of revenue.
“So, what we need to do is to increase revenue to be able to enhance our debt to GDP obligation capacity. If we say we will not borrow and therefore not build rails and major infrastructure until our revenue rises enough, then, we will regress as a country. We will be left behind; we won’t be able to improve our business environment and our economy will not grow.
She said, as of December 31, 2020, Nigeria borrowed up to N32.9 trillion, representing 21.6 percent of the GDP, meanwhile, in 2019, the debt to GDP ratio was 19.2 percent, added only by 2 percent.
The minister said there would be a supplementary budget for the 2021 national budget.
“There will be a supplementary budget, the first one will be in March relating the COVID-19 pandemic but we will also have a mid-year review like we did last year of the budget and if at the time we do the review there is a need to go back to do any amendment for a supplementary budget, at that time we will take that decision, if not, we will just report the review,” she said.
