The Minister of Finance, Budget and National Planning, Zainab Ahmed, in her defence of Nigeria’s mounting debt has insisted that the Federal Government’s borrowings played a huge role in the country’s quick exit from recession.
This is as the government explained that it had to spend its way out of recession mostly in the form of capital expenditure for the provision of infrastructural development.
This was made known by Ahmed during a public presentation and breakdown of the 2022 Appropriation Bill on Friday in Abuja. The budget breakdown is coming a day after President Muhammadu Buhari presented the Appropriation Bill to the National Assembly.
What the Finance Minister is saying
Ahmed said, “Having witnessed two consecutive recessions, we have had to spend our way out of recession which contributed significantly to the growth of our public debts. It is unlikely that our recovery from these recessions would have been as fast without the sustained government expenditure funded partly by debt.”
Despite concerns raised by critics and opposition parties, the finance minister explained that borrowings have helped the government in providing infrastructure to boost the economy as well as help curb the country’s rising level of insecurity.
She said, “Borrowings are essential to enable us to deploy necessary capital expenditure and invest in human capital development.
“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!”
She further assured Nigerians that the federal government’s debt portfolio is still within sustainable limits.
What you should know
It can be recalled that on Thursday, October 7, 2021, President Muhammadu Buhari presented a N16.4 trillion 2022 Budget of Economic Growth and Sustainability to a joint session of the National Assembly.
The finance minister had yesterday said that the Federal Government was ready to borrow from both local and foreign sources to finance the N6.258 trillion deficit in the proposed 2022 budget.
The move was greeted with controversy across the country. Critics and members of the opposition said the development, as well as other borrowings by the Federal Government, call for concern.