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Adeosun, Udoma on collision course over how to source $2.3bn budget deficit

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Adeosun, Udoma on collision course over how to source $2.3bn budget deficit

What looks like a fresh ministerial face-off is about to ensue in the Presidency. This time, it is between Nigeria’s Minister of Finance, Mrs. Kemi Adeosun, and her counterpart, the Minister of Budget and Planning, Senator Udoma Udo Udoma

At the centre of the disagreement is whether or not Nigeria has the capacity to internally source the $2.3 billion deficit in the 2017 budget.

On her part, Mrs Adeosun held that Nigeria must cease further external borrowing to fund its budgets, and condemned the country’s continuous reliance on IMF and World Bank to raise money needed to upset the deficit.

Speaking at the Presidential Quarterly Business Forum held at the Presidential Villa in Abuja on Tuesday, the Minister said, “Given the reform in the Federal Inland Revenue Service (FIRS), the country can raise the needed fund within its shores.”

Adeosun’s call runs contrarty to the position by the Minister of Budget and National Planing, Udoma Udo Udoma who told journalists in Abuja that there would be no alternative to the planned foreign loans of $2 billion from the World Bank.

However, all the international lending institutions, including the IMF/World Bank and African Development Bank have insisted that Nigeria must carry out a number of far-reaching structural adjustment programmes to qualify for loan facility from any if them.

Officials of the Ministry of Budget and National Planning said, Senator Udoma had not been comfortable with Adeosun’s stance on how to source funds for the N7.3 trillion budget of 2017.

Read also: FG to commit $500m eurobond to finance N4tn budget deficit, writes NASS

But Adeosun, who in the early part of 2016 equally disagreed with the CBN Governor, Godwin Emefiele on the apex bank’s refusal to reduce the interest rate and fight inflation, both of which remain the highest in most developing economies, said Nigeria should tap its resources.

According to her, Nigeria should no longer seek any budget-related loans, even as she denied that her office was supporting plans by the Debt Management Office (DMO), in collaboration with the Budget Office to raise about $1.5 billion from any willing international creditor agency.

Adeosun put it this way: “We cannot borrow anymore, we just have to generate funds domestically enough to fund our budget. Mobilize revenue to fund the necessary budget increase.”

She refused to address the recent claim by the budget office that the country’s estimated shortfall in internally generated revenue was $7.5 billion, which is feared would adversely affect the 2017 budget implementation.

However, the Budget department was alleged to have expressed hope that if Nigeria is able to get $3.5 billion from the lender institutions, the possibility of running the 2017 budget much easier than that of 2016 could be guaranteed.

Besides the proposed borrowing from the international bodies, Nigeria also targeted raising about $4 billion from the local debt market, through bonds and Treasury Bills sales for the budget.

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0 Comments

  1. yanju omotodun

    July 12, 2017 at 7:15 am

    So what’s the face off here if I may ask? That’s udoma is comfortable with adeosun’s point of view or how?
    Well Adeosun has spoken, Nigeria will be fine by doing away from borrow borrow

    • seyi jelili

      July 12, 2017 at 8:14 am

      There is no how we won’t borrow but we borrow and use the fund for the purposes for borrowing . All nations in the world borrow but the problem in Nigeria is that, we are not a producing nation which make debts to burden us a lot. We have to wake our industries to balance our deficit

  2. JOHNSON PETER

    July 12, 2017 at 9:09 am

    FIRS and custom are enough to raise the whole capital needed for the finance of the 2017 budget but corruption won’t allow such. Well
    , I have no dealings with Nigeria again, I belong to Biafra

  3. Animashaun Ayodeji

    July 12, 2017 at 12:03 pm

    Borrowing money from external money is just another way of putting Nigeria’s future in debt, we’ve borrowed enough, we need to start making money internally like Adeosun has said.

    • Abeni Adebisi

      July 12, 2017 at 12:08 pm

      It will be very hard for Nigeria to survive without borrowing from outside sources, we have to keep borrowing until we gain balance. If the borrowed funds are well spent, we’all be able to pay back in a short while.

      • Anita Kingsley

        July 12, 2017 at 12:13 pm

        The problem with you Nigerians I am that there’s nothing in your brains other than corruption. All the monies that your government have been borrowing, where did they put them? What have they done with them? You people need to take charge and fight for your rights like biafrans are currently doing.

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