Minister of Finance, Mrs. Zainab Ahmed, yesterday, restated the Federal Government’s commitment to tap concessionary long-term loans to finance its 2019 budget in addition to borrowing at home.
Speaking after the Federal Executive Council (FEC) meeting in Abuja, the Minister said, “we intend to fund the 2019 budget through borrowing locally and internationally with a spread of 50:50. Our focus is on concessionary long-term loans.”
Nigeria, Africa’s biggest economy, has borrowed overseas and at home over the past three years to finance its budgets and fund infrastructure projects with debt servicing obligations on the rise.
Ahmed said there are challenges generating revenue locally, while admitting that the 2018 budgetactually performed well. She said the government had put in place strategies on how to finance the 2019 budget of N8.83 trillion ($28.9 billion).
Nigeria’s budgets under President Muhammadu Buhari, who begins a second term in May, have been the largest ever but have failed to provide the type of capital spending needed to improve infrastructure due to funding challenges. The government has been seeking to boost revenue after it emerged from a 2016 recession two years ago.
At Tuesday’s Monetary Policy Committee (MPC) meeting, the Central Bank of Nigeria (CBN) agreed to cut its benchmark interest rate for the first time in three years by 50 basis points to 13.5 per cent in an attempt to try to stimulate growth, a move which could also lower borrowing cost for the government.
Buhari has pledged to revive the economy, which has faced low growth since emerging from its first recession in 25 years, in 2017 after defeating Atiku Abubakar in the last presidential election to win re-election.