…says supplementary budget for COVID-19 vaccination underway
Minister of Finance, Budget and National Planning, Zainab Ahmed, has said that Nigeria’s economy will regress and get stunted if the country refuses to borrow to build infrastructures. Ahmed, who said this at a briefing held at the Presidential Villa yesterday, also disclosed that the Federal Government will, by March, this year, present a supplementary budget for the acquisition of COVID-19 vaccines and vaccination of the people.
The maiden weekly briefing is a platform put together by the Presidential communication team to inform Nigerians of various efforts by the Muhammadu Buhari-led administration to develop the country. The minister, who insisted that the level of borrowing by the government is still within reasonable threshold, said: “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.
“So, it is a decision that every government has to take. Our assessment is that we need to borrow to build our major infrastructure. We just need to make sure that when we borrow, we are applying the borrowing to specific major infrastructure that will enhance the business environment in this country.
“Again, we all have to work, not just the Federal Government, but state governments to increase our revenue and enhance our debt service obligations. We also have to make sure that when we are choosing the projects, we are choosing carefully the ones that will enhance business environment so that more revenue yields come into the treasuries of the country.” According to her, the total borrowing of the country as at 31st December stood at N32.9 trillion, representing 21.6 per cent of the GDP.
“So, if we were not looking at adding the other category of loans that I mentioned, we don’t even need to increase that at this time. As at 2019, the debt to GDP ratio was 19.2 per cent, so only two percent was added,” she said. On the plan to forward a supplementary budget to the National Assembly by March, Ahmed noted that there was no provision for the acquisition of COVID-19 vaccines in the 2021 budget.
She disclosed that her ministry and that of Health will meet to finalize on the amount required for procurement of the vaccines. Ahmed described as a welcome development the rising price of crude oil in the global market, saying, “This is a good omen for Nigeria”. According to her, gaining more revenue from the sale of crude will yield more revenue for government as well as reduce the country’s rate of borrowing. The minister said: “The more revenue we realise 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.” On the support facility made available to Nigeria by the World Bank and other international financial institutions, the minister said: “We closed 2020 by being able to realise $3.4 billion from International Monetary Fund (IMF), $600 million from African Development Bank (AfDB). We were not able to conclude our negotiation with the World Bank and also with the Islamic Development Bank.
“Even with Islamic Development Bank, we signed for the last tranches, but for the World Bank, we started negotiation with the list of about 10 requirements that we needed to address and we had addressed those 10 requirements. “But, the World Bank’s position is that we have not sufficiently addressed the requirements relating to having a single exchange rate. “Our point is that, it is not what you do overnight.
It’s not that you wake up and make a pronouncement and that happens. It’s something that you have to do over time taking several measures and working systematically for it to happen. “So, we are still pushing our view with the World Bank and we hope to convince them that this requirement has also been met and that they should now give us approval to go ahead and release the $1.5 billion that we have been discussing with the World Bank.’’
She said that the World Bank had, in 2020, approved some facilities for Nigeria which included the $500 million for metering system for the distribution network, $750 million for the power sector recovery programme. She said that several other facilities that were tabled before the World Bank also got approval in the year under review. Ahmed added that there were plans to get the Federal Executive Council (FEC) to approve a memo to compel MDAs to patronize made in Nigeria goods. “The Federal Government is committed to buying made in Nigeria products, vehicles in particular.
So, we will be hoping to have a FEC’s approval to compel government agencies to buy made in Nigeria vehicles as much as is practicable. So, when the security agencies need a security vehicle that is specially designed, and you don’t have it in Nigeria, we will still need to buy the ones that are outside.
“We’re hoping to also engage the states and encourage them to take similar measures. It is important for us because we want to make sure the automotive industry survives and grows. The Federal Ministry of Industry, Trade and Investment has just finished a review of automated policy, which has been running now for seven years.” Ahmed also said that the country was on its way to restoring consistent and stable growth, adding that Nigeria exiting recession faster than expected despite the impact of the COVID-19 pandemic was due to the fiscal and monetary policies as well as the Economic Sustainability Plan.