Borrowing instrumental to Nigeria’s exit from recession – Ahmed

By our reporter/ Nigeria’s minister of finance, budget and national planning, Zainab Ahmed on Friday explained that recent borrowings by the Federal Government were instrumental to the country’s exit from recessions.

Ahmed who made the disclosure during the public presentation and Breakdown of the 2022 Appropriation Bill, noted that the country witnessed two consecutive recessions and had to spend its way out of it.

“Having witnessed two consecutive recessions, we have had to spend our way out of the recession which contributed significantly to the growth of our public debts,” the minister said on Friday.

“It is unlikely that our recovery from these recessions would have been as fast without the sustained government expenditure funded partly by debt.”

Before now, the minister had said Nigeria will fund its 2022 budget deficit, pegged at N6.258 trillion, through fresh borrowings.

The move was greeted with controversy across the country. Critics and members of the opposition said the development, as well as other borrowings by the Federal Government, call for concern.

However, Zainab on Friday while responding to critics explained that borrowings have helped the government in providing infrastructure to boost the economy.

“Borrowings are essential to enable us to deploy necessary capital expenditure and invest in human capital development,” she maintained.

According to her, with the country’s rising levels of insecurity, the government had to resort to borrowing.

“To compound matters, the country has technically been at war, with the pervasive security challenges across the nation,” the minister added.

“This has necessitated massive expenditures on security equipment and operations, contributing to the fiscal deficit; Defence and Security sector accounts for 22% of the 2022 budget!”

The minister further allayed fears over Nigeria’s rising debts, insisting the “debt level of the Federal Government is still within sustainable limits”.