The Federal Government will continue to borrow to fund the budget for 2017, the finance ministry said in a statement on Thursday, after the finance minister said on Tuesday that Nigeria “cannot borrow anymore”.
Adeosun’s comments had raised questions about how Nigeria would fund its budget for the year and about planned foreign loans of $2 billion from lenders like the World Bank.
“We have headroom to borrow and are doing so aggressively in the short to medium term in order to address our infrastructure deficit and to stimulate growth,” Thursday’s statement said.
“At the same time, it is vital that Nigeria diversifies its revenue base and builds its revenue profile,” it said. That would “ensure that we do not continue to overly rely on debt to fund our budget spending over the long term.”
To reduce the need for debt, the finance ministry is trying to increase Nigeria’s tax collection revenues. It hopes to raise at least $1 billion from a scheme that will give tax evaders a chance to make payments retroactively, said Reuters on Thursday.
The minister earlier in the week at a business forum in Abuja said, “We cannot borrow anymore, we just have to generate funds domestically enough to fund our budget. Mobilize revenue to fund the necessary budget increase.”