The Minister of Finance, Mrs Zainab Shamshuna Ahmed, has disclosed that Nigeria’s borrowing still remains at 19 per cent to the Gross Domestic Product (GDP), and is low compared to Ghana, Brazil, South Africa, Egypt and Angola.
The Minister made the statement while clearing the true position of reports surrounding the removal of fuel subsidy, which she maintained that there was no such plan, but was just an advise by the International Monetary Fund (IMF), at the just concluded Spring Meetings in Washington DC, United States of America, USA, as contained in a statement signed by the Special Adviser to the Minister of Finance on Media and Communications, Mr Paul Ella Abechi.
According to her the difference on the issue of subsidy as compared to previous regimes where subsidy was paid to marketers, but this time around “NNPC is the sole importer of petroleum products, and so when they import is the cost of business and they deduct that cost before they remit the little money to the federation account. So that is completely different.”
She also added that “It is more cost effective, it is cheaper and what is being done now is easier to monitor what transpired.”
She said, “In the borrowing, we are still at 19 per cent to GDP our borrowing is still low. What is allowed by our Fiscal Responsibility Act is the maximum of 25 per cent of our GDP compared to other countries like; Ghana, Egypt, South Africa, Angola and Brazil and we are the lowest in terms of borrowing.
However, the Minister acknowledged and pointed at the challenge of revenue generation by the country, “What we have is revenue problem and when revenues perform the aggregate rate of 55 per cent it hinders the ability to operate in our budget.
“So it hinders our ability to service all categories of expenditures including salaries, allowances, capitals as well as debts.”
Meanwhile, she made it known that the Ministry is not resting on its oars in regards to boosting the nation’s revenue.
“So what we are doing at the Ministry of Finance is concentrating and enhancing of our revenue and collection capacities”, she stated.
The Minister also maintained and assured Nigerians that there is no intention of subsidy removal as reported in some sections of the media, as government has not come up with any plan in that direction.
“We are not there yet and we discuss this periodically under the Economic Management Team, but we have not found a formula that works for Nigeria and you know Nigeria is unique because what works in Ghana may not work in here. So it is still work in progress and so there is no intention to remove fuel subsidy at this time”, she assured.