{"id":104763,"date":"2023-05-10T21:36:07","date_gmt":"2023-05-10T20:36:07","guid":{"rendered":"https:\/\/pointblanknews.com\/pbn\/?p=104763"},"modified":"2023-05-10T21:36:07","modified_gmt":"2023-05-10T20:36:07","slug":"nigerias-borrowing-trouble-imminent-says-budget-office","status":"publish","type":"post","link":"https:\/\/pointblanknews.com\/pbn\/news\/nigerias-borrowing-trouble-imminent-says-budget-office\/","title":{"rendered":"Nigeria\u2019s borrowing: \u2018Trouble\u2019 imminent, says Budget Office"},"content":{"rendered":"
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The Budget Office of the Federation has said Nigeria now has a \u201climited borrowing space\u201d due to its poor debt-to-revenue ratio, stressing that \u201ctrouble\u201d looms for the country if it exceeds its limits.<\/div>\n
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\nThe office issued the warning as the outgoing President, Major General Muhammadu Buhari (retd.), wrote to the National Assembly seeking approval for a fresh $800m loan from the World Bank.<\/p>\n

Director-General of the Budget Office, Ben Akabueze, while addressing members-elect of the 10th National Assembly at their week-long induction ceremony in Abuja on Wednesday, pointed out that while Nigeria remains healthy with its debt-to-GDP ratio, the country is not with its debt-to-revenue ratio.<\/p>\n

Akabueze was speaking to the newly elected and returning members of the National Assembly, which is responsible for the consideration, amendment and passage of annual budgets of the Federal Government as well as economy bills like the Finance Bill.<\/p>\n

He said, \u201cYou may have heard that we have one of the lowest Gross Domestic Products-to-debt ratios in the world. While the size of the FG budget for 2023 created some excitement, the aggregate budget of all the governments in the country amounted to about N30tn. That is less than 15 per cent in terms of ratio to GDP.<\/p>\n

\u201cEven on the African continent, the ratio of spending is about 20 per cent. South Africa is about 30 per cent; Morocco is about 40 per cent. And at 15 per cent, that is too small for our needs. That is why there is fierce competition for the limited resources.<\/p>\n

\u201cThat can determine how much we can relatively borrow. We now have very limited borrowing space; not because our debt to GDP is high, but because our revenue is too small to sustain the size of our debt. That explains our high debt service ratio. Once a country\u2019s debt service ratio exceeds 30 per cent, that country is in trouble and we are pushing towards 100 per cent, and that tells you how much trouble we are in.<\/p>\n

\u201cWe have limited space to borrow. When you take how much you can generate in terms of revenue and what you can reasonably borrow, that establishes the size of the budget. The next thing would be to pay attention to the government\u2019s priority regarding what project gets what.\u201d<\/p>\n

Akabueze also stated that Nigeria should not be classified as an oil-rich economy.
\n\u201cWe are not even an oil-rich economy. To classify oil-rich economies, you talk of countries like Saudi Arabia where there are 34 million of them and pump 10 million barrels of crude per day, or Kuwait where there are 3 million of them and pump 3 million barrels per day,\u201d he said<\/p>\n

The Budget Office boss added that while Nigeria has a population of over 200 million, \u201cwe are currently pumping about 1.9 million barrels per day.\u201d<\/p>\n

He stressed, \u201cSo, we are not a rich economy and must resist the temptation we are an oil-rich economy. Let me make it clear that we are potentially rich countries, but we are not.\u201d<\/p>\n

About the same time Akabuaeze was addressing the National Assembly members-elect, the President of the Senate, Ahmad Lawan, read out Buhari\u2019s request to lawmakers on the floor of the Senate.<\/p>\n

$800m for social security
\nThe President partly wrote, \u201cPlease note that the Federal Executive Council approved an additional loan facility to the tune of $800 million to be secured from the World Bank, for the National Social Safety Net Programme and the need to request for your consideration and approval to ensure early implementation.<\/p>\n

\u201cThe Senate may wish to note that the programme is intended to expand coverage of shock responsive safety net support among the poor and vulnerable Nigerians. This will assist them in coping with the costs of meeting basic needs.<\/p>\n

\u201cYou may wish to note that, the Federal Government of Nigeria under the conditional cash transfer window of the programme will transfer the sum of N5,000 per month to 10.2 million poor and low-income households for a period of six months, with a multiplier effect on about 60 million individuals. In order to guarantee the credibility of the process, digital transfers will be made directly to beneficiaries\u2019 accounts and mobile wallets.<\/p>\n

\u201cThe NASSP being a social intervention programme will stimulate activities in the informal sector, improve nutrition, health, education and human capital development of beneficiary households.\u201d<\/p>\n

Buhari added, \u201cGiven the above, I wish to invite the Senate to kindly approve an additional loan facility to the tune of USD8OO million to be secured from the World Bank for the National Social Safety Net Programme,\u201d expressing hope that the request will \u201creceive expeditious consideration by the Senate.\u201d<\/p><\/div>\n<\/div>\n<\/div>\n<\/div>\n

<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Budget Office of the Federation has said Nigeria now has a \u201climited borrowing space\u201d due to its poor debt-to-revenue ratio, stressing that \u201ctrouble\u201d looms for the country if it…<\/p>\n","protected":false},"author":1,"featured_media":104764,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[5],"tags":[],"class_list":["post-104763","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\nNigeria\u2019s borrowing: \u2018Trouble\u2019 imminent, says Budget Office - Pointblank News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/pointblanknews.com\/pbn\/news\/nigerias-borrowing-trouble-imminent-says-budget-office\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nigeria\u2019s borrowing: \u2018Trouble\u2019 imminent, says Budget Office - 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