Uche Usim, Abuja
Minister of Finance, Mrs. Zainab Ahmed, yesterday said the Federal Government has suspended its $22.7 billion external borrowing plans due to the collateral effect of Coronavirus that has disrupted the economies of potential multilateral lender nations.
Speaking in Abuja, at the 2020 International Conference on the Nigerian Commodities Market, organised by the Securities and Exchange Commission, (SEC), Ahmed said government would not go ahead with the borrowing programme even if it secures the approval of the two chambers of the National Assembly.
This was as the Federal Government hinted that the coronavirus pandemic has forced it to delay the issuance of its $3.3 billion eurobond as offshore subscribers have jettisoned financial transactions to contain the dreaded virus. The Minister said “the decision to delay the issuance of the bond was based on the conviction that the global economy was going through challenging times due to the outbreak of the coronavirus pandemic”.
Ahmed said the delay was totally inevitable, regardless of whether the request was approved by the National Assembly. She explained that the decision of the government to suspend the borrowing plan was due to the fact that market indices do not support external borrowings at the moment. She said, “The parliament is still doing its work on the borrowing plan. One arm of the parliament has completed theirs and the other arm is still working and it is a process that is controlled by the parliament itself, so we are waiting.
“However, we are not going out immediately because market indicators are not in favour of external borrowing at this time. Even if we get approvals we will defer it and watch the market and go out only when the timing is right.” She explained that the Federal Government was not relenting on its plans to diversify the country’s economy, noting that unfolding events of the past few months, the coronavirus pandemic and the oil price war, had further reinforced the resolve to diversify the national economy. She disclosed that the current challenges in the global economy had brought to the fore the need for the country to develop a non-oil attitude to everything.
According to her, the Federal Government planned to prioritize expenditure in favour of major capital expenditures that would have greater impact, and which would create job and visibility and also enhance the ease of doing business in the country. She noted that expenditures that are not critical must be deferred to a later date when things become more normal.
She said, “Several national plans, programmes and projects have been directed at diversifying the production and revenue structures of our economy. Also speaking, Vice President Yemi Osinbajo, stated that the government was taking steps towards developing the Nigerian commodities market.