The Federal Government has stated that Nigeria may seek a bailout from the International Monetary Fund (IMF) over its mounting debts if it cannot address its fiscal challenges before further escalating.
This was disclosed by the Director General of the Budget Office of the Federation, Ben Akabueze, during an interview on an Arise Television programme, where he insisted that Nigeria needs to sort out its revenue problem.
Akabueze, who said that although Nigeria was not yet in that kind of desperate situation to seek relief from IMF, however, warned that the country may unwillingly ask for a bailout from the multilateral financial institution if the fiscal challenges are not addressed in a sensible and sustainable manner.
What the Budget Office Director General is saying
Akabueze, on the rising fiscal headwinds, said, “Essentially, there are two ways countries end up with the IMF. One is voluntary when they just say look IMF come we need help, or when things get to the grind where they simply have no other option.
“I don’t see Nigeria going to the IMF voluntarily. It’s a hot issue here in Nigeria. But the honest truth is that if we don’t address our fiscal challenges in a sensible and sustainable manner, we may end up unwillingly with the IMF.’’
Going further, he added. “We are not there yet at the point of involuntary. But we could as much stop digging. There is a maxim that if you find yourself in a pit, you should stop digging and start climbing out.
“And if we continue to fund regressive deficits, it is tantamount to continuing to dig. If we continue to pass on reasonable opportunities to increase revenues by introducing taxes, it is tantamount to continue digging.
“Even though I said we should not cut expenditure in total, we need to get more efficient in our spending. If we don’t do that again, it is tantamount to continuing to dig.”
The Budget Office boss said that although he would not advocate for cutting expenditure in total, he advised that the country should be more efficient in its spending, noting that if that the inability to do that will be tantamount to also digging into the hole.
In case you missed it
- Akabueze in the same interview suggested that the Asset Management Corporation of Nigeria (AMCON) should increase the amount of statutory contribution made by banks.
- The Budget Office also disagreed with the Minister of Communications and Digital Economy, Isa Pantanmi, on the suspension of the 5% excise duty on telecommunication services.
IMF loans often come with stringent conditionalities.. We should think before we leap!!!