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Nigeria can’t survive without borrowing –Adeosun

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BUDGET 2017: Nigerian Govt to release N750bn to MDAs this December

Until Nigeria generates enough foreign exchange and finds solution to its over bloated head cost, the country will not cease going to international credit institutions for loans.

This was the view of the Finance Minister, Mrs. Kemi Adeosun, who at a public function in Abuja disclosed that the President Muhammadu Buhari administration was passing through a challenge in settling its foreign loans and contractors, which had been piling up in the past 10 years with a dwindling revenue.

According to the Minister, “Over N15 billion is run as over head cost in Nigeria monthly with over N200 billion owed local contractors and servicing outstanding loan obligations, all of these are mounting pressures on the limited internally generated revenue.

“That further means that without foreign loans, there is no way the country can meet up all its obligations. Of course, no country is without loan so long as they are used for real development of the economy”,

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The minister said if the argument is that government should not borrow but wait for the price of oil to bounce back, “the prognosis is that it’s not going to go back to $110 per barrel any time soon.”

As at date, Nigeria is expecting about $30 billion from a number of international institutions to enable it meet obligations of both 2016 and 2017 budgets, which are said to have been hampered by some negative developments, including IMF not being in a hurry to meet the request.

But a number of experts have differed with the minister on the best way out, holding that there are still openings besides going for loans, so long as government has taken proper note of calls for a lasting policy on revamping the economy.

John Odeh, a chartered accountant with JFC Consults said: “A country that has the opportunity to diversify its economy on several occasions, but fails to do so will not have it easy meeting its local and internal obligations. But the recession is yet another opportunity for Nigeria to make a difference.”

Mr. Atonde Peterside, a banker and investment expert, said the way out of the challenge so far identified is not for Nigeria to go cap in hand begging for loans at any condition to diversify its revenue base.

He said having identified over-bloated personnel cost as part of the problems facing the country, the best option is to take a corrective measure towards solving such problem and have the economy enjoy some breathing space for real growth.

But the Minister’s position, said officials of DMO, is likely to be misread by members of the public to mean that the country was going for the international loans to pay salaries and contractors.

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0 Comments

  1. Roland Uchendu Pele

    January 20, 2017 at 11:40 am

    Here in Nigeria, a public official would rather play around with words than perform reasonable duties in order not to step on the toes of those who appointed him/her.
    We all understand how much money goes into the welfare of governors, senators, ministers and all other, and we know we can fix that if we really want to. But we prefer to give reasons that are far away from the truth when offering our unrealistic analyses.

    • seyi jelili

      January 20, 2017 at 8:51 pm

      Roland, no matter what, getting loan is inevitable if the country must get out of recession but majorly we need to eliminate corruption first. Because if the loans are given, some corrupt officials could siphon it and also mismanagement of funds can come to fore.

  2. Margret Dickson

    January 20, 2017 at 12:56 pm

    The first problem Nigeria is facing regarding economic recession is our so called finance minister, Kemi Adeosun who believes in the mentality of ‘Borrow To Fix’ economy. Nigeria cannot improve economically if this mentality is not erased, and to erase this evil mentality, Buhari needs to remove Kemi Adeosun and replace her with someone who is more practical and more intelligent.

    • JOHNSON PETER

      January 20, 2017 at 4:39 pm

      Adeosun has not said or done anything wrong. Truly Nigeria can’t survive without borrowing no matter what we do, there is no money in the treasury and our external reserve is nothing.

  3. Animashaun Ayodeji

    January 20, 2017 at 1:19 pm

    To those criticizing Buhari’s government for being too slow and not active, i think you people must have realized Buhari is also suffering from the problems caused by Obasanjo. Debts of 10 years with over N200bn yet to be paid tolocal contractors and servicing outstanding loan obligations. How is Buhari and is people supposed to focus on achieving their campaign promises without clearing these debts? Jonathan was also a President, he left the seat with loans and a lot of public funds were embezzled.

    • Johnson Amadi

      January 20, 2017 at 1:23 pm

      Buhari is a typical example of a good president who wants Nigeria to change for good. If he’s not ready to pay all these debts, the next president will have the same problem and give Nigerians same old story we’ve been listening to. Once this debts are sorted, I’m sure Nigeria will improve and the government will focus on carrying out their campaign promises.

  4. Balarabe musa

    January 20, 2017 at 9:43 pm

    We might not really need to borrow much to make the country survive. All we need do, is to cut cost of governance. Sincerely the money we use in this country to run governance is extremely uncalled for. How can a senator be gulping close to 32 million naira in a month?
    How can a house of rep member be gulping 23million naira per month? How can president feeding allocation be summing up to #1 billion naira? And so on and so forth.
    To me, I see no reason why a senator should earn a million naira per month , we waste money in this country.

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