NIGERIA – The minister of finance, Kemi Adeosun, in a chat with Bloomberg, revealed that Nigeria would borrow internationally and locally to finance the deficit in the 2016 budget.
She explained that the decision was based on the pressure confronting the economy as a result of plunging oil prices in the global crude market.
However, Adeosun, noted that MTN’s fine, which stands at N780 billion – over 10 percent of the budget – has nothing to do with its funding. The Nigerian Communications Commission (NCC) earlier fined MTN N1.04 trillion – more than 12 percent of the 2016 budget – for its failure to disconnect over five million unregistered lines.
“We need to stimulate the economy because we cannot afford this downturn to be excessively prolonged,” she said.
“We think we have the headroom to borrow. We’re going to mix it between local and foreign debt. We’re talking to multilateral agencies already and we’re at an advanced stage. Then we’ll look at the foreign capital markets.
“The budget will not include income from regulatory fines, such as the $3.9 billion levied on MTN Group Ltd.”
Adeosun disclosed plans to boost non-oil revenue by N1.6 trillion in 2016, to help make up for the shortfall in earnings from crude exports.
She said about N1 trillion would come from government agencies and ministries, which “have always been in the practise of not remitting funds generated”.
Adeosun spoke on the need to audit recurrent expenditure, which is up to N1.7 trillion in payroll alone.
“If you’re spending that amount on something, you should be auditing and reviewing it. That’s a process we are just about to finalise,” she said.
“The deficits in the 2016 budget – which I based on an oil price of $38 per barrel – will more than double to N2.2 trillion.”
She revealed that Nigeria’s 12 percent debt-to-GDP ratio according to the International Monetary Fund (IMF), is expected to aid the country in borrowing internationally.
