The Minister of Finance, Mrs Zainab Ahmed, has said that Nigeria’s debt which currently stands at about N24.3Tn is still within sustainable limit. She said that the country’s debt, which is about 19 per cent to the Gross Domestic Product, was still low compared to Ghana, Brazil, South Africa, Egypt and Angola.
She said, “In the borrowing, we are still at 19 per cent to GDP; our borrowing is still low. “What is allowed by our Fiscal Responsibility Act is the maximum of 25 per cent of our GDP compared to other countries like Ghana, Egypt, South Africa, Angola and Brazil and we are the lowest in terms of borrowing.”
In a statement from the Minister’s Media Adviser, Mr Paul Ella, she maintained that there was no plan to remove fuel subsidy as being speculated. She said that the current subsidy arrangement which was in the form of under recovery by the Nigerian National Petroleum Corporation was far better than what was obtainable when oil marketers were paid directly for fuel subsidy.
She said, “NNPC is the sole importer of petroleum products, and so when they import it is the cost of business and they deduct that cost before they remit the little money to the federation account. So that is completely different. “It is more cost effective, it is cheaper and what is being done now is easier to monitor than what transpired.
“We are not there yet and we discuss this periodically under the Economic Management Team. But we have not found a formula that works for Nigeria and you know Nigeria is unique because what works in Ghana may not work in here.
“So, it is still work in progress and so there is no intention to remove fuel subsidy at this time.” In the area of revenue generation, she said that while the country had revenue challenges, efforts are currently being made to shore revenue. She said, “What we have is revenue problem and when revenues perform at the aggregate rate of 55 per cent, it hinders the ability to operate in our budget.
“So, it hinders our ability to service all categories of expenditures including salaries, allowances, capitals as well as debts.” So, what we are doing at the Ministry of Finance is concentrating and enhancing of our revenue and collection capacities.”