Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, emphasised on Thursday that Nigeria shouldn’t solely depend on borrowing to finance the 2024 budget. Edun shared this stance during his appearance before the joint Senate Committee on the 2024–2026 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) in Abuja.
Highlighting the necessity for a different approach, Edun proposed investing more in infrastructure to boost revenue generation as the primary means of funding the budget.
“In the current global and national environment, relying solely on borrowing is not feasible. Our aim is to minimise borrowing and deficit financing for the 2024 budget,” stated Edun, pointing out the international emphasis on reducing inflation rates for economic stabilisation and investment growth.
He stressed the impact of high interest rates on investment and the limited affordability of accessing funds through borrowing due to the existing debt profile and high debt servicing, comprising 98% of government revenue.
Edun underscored the significance of government spending, highlighting Nigeria’s comparatively low budget expenditure as a percentage of GDP compared to other nations like Ghana, where the budget percentage stands at 25%, emphasising the need for increased spending.
“Government spending will invariably lead to increased revenues, a crucial aspect, especially in the short and medium term,” he added.
Expressing concerns about the revenue projections provided by government agencies, Senator Sani Musa, the Committee Chairman, raised fears that the figures presented by these agencies fell below the Federal Government’s 2024 projections.