By Abdullahi M. Gulloma Abuja
Th e federal government yesterday declared that continuous borrowing was not in the best interest of the country; hence the need to reduce the trend as the debt profi le rises. Th e nation’s total debt profi le stands at N5.4 trillion, while government plans to borrow to fund the defi cit of N2.36 trillion in the 2017 budget. Minister of Finance, Mrs. Kemi Adeosun, disclosed this at the Quarterly Presidential Business Forum held at the State House in Abuja. Th e quarterly meeting, which is the fourth in the series, focused on tax policy and power, and was attended by the Organised Private Sector stakeholders.
Th e minister said, government needed to improve on its revenue generation as it could no longer depend on borrowing to fund its annual spending, which was not even big enough. “We cannot borrow anymore, we just have to generate enough to fund our budget,” Adeosun said, adding that the government needs to “mobilise revenue to fund the necessary budget increase” and that this would be mostly drawn from tax. “We need to mobilise additional revenue to fund our budget. We have got to get our budget bigger, and to do that, we cannot borrow anymore. We simply have to generate more revenue, we have to plug the leakages, we have to improve tax collection so that we can manage our borrowing,” she said. Adeosun expressed concerns that the country’s budget is one of the lowest amongst its peers in the world, stressing that in order to join the league of global big players; Nigeria has to do what they do.
“Our budget is signifi cantly lower when attached to GDP; we are currently at six per cent. It is lower than all our peers. We are currently at six percent and that is the lowest in SubSaharan Africa and one of the lowest in the world. Our budget size is too small and that means we can only pay salaries in some cases and we don’t have money to deliver essential services. “Th ere simply isn’t enough money in government to do what government wants to do. I am sure you will say that is because people are stealing or because you are wasting money. But I am saying even if you plug all the stealing and all the waste, the budget size is not big enough and that is because we are not paying enough in terms of tax or we are not collecting enough in terms of tax.
“Statistics show our tax to GDP at six per cent, subSaharan Africa averages 17 per cent, Asia 26 per cent. Most of the emerging market and the advanced countries are at 30-35 percent. “So, if we want to move with the prosperous countries, we have to do what they do. We will not achieve prosperity for Nigeria if we continue on the tax to GDP ratio that is in the peer group of Afghanistan. “I’m sure none of us aspires for Nigeria to become like Afghanistan, we are trying to benchmark ourselves against more developed countries and we must have to address these problems in a more fundamental sense.