By Merit ibe
Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, has disclosed that the Federal Government is exceeding its borrowing plan for 2021.
The minister blamed the development on the COVID-19 pandemic and the fall in oil prices, saying inflation had continued to heighten, worsened by an inadequate supply of foreign exchange (forex).
She added that the problems have a lot of multiplier effects on the economy.
Mrs Ahmed, who stated this in an interview with Arise TV, explained that “the fiscal space remains tight, but the Federal Government was re-planning, cutting down non-essential expenditures and providing resources where they are most needed like in the health sector”.
Ahmed noted that a World Bank report, which puts a large portion of Nigerians under the poverty line, was disturbing, saying it was caused largely by the COVID-19 pandemic and fall in oil prices.
However, she said the economic sustainability plan was targeting massive recruitment, health insurance and a review of the poverty indices, to redress the COVID-19 setback.
“Our fiscal threshold was that we shouldn’t borrow more than 3 per cent of Gross Domestic Product (GDP), now we are at about 4 per cent of GDP and that’s a target that we are trying to work on and bring down,” she said.
On revenue, she stated that the target is to move revenue to GDP from the current 8 per cent to 15 per cent, adding that the 8 per cent is low for the size of the Nigerian economy.
As for ease of doing business, the minister noted that the Federal Government’s suspension of Twitter’s operations won’t affect Nigeria’s image as no foreign body should be allowed to cause war in the country.
“You cannot shut out the president of a country and not expect consequences,” the minister added.
She described the suspension of Twitter as a well-thought-out decision, saying it shouldn’t affect the country’s image in the eyes of international investors.
She said the move was “not something that we take lightly,” and that the government had planned talks with the social media company over the issue.
The minister identified accessing available doses as the biggest challenge facing the country’s COVID-19 vaccination programme.
Nigeria has so far only received four million of the 43 million vaccines it was promised by the Covax programme, according to the minister, who said the government expected to vaccinate 70 per cent of its population by next year.
Ahmed hoped for a strong upsurge in growth by the end of the year.
She said the government is planning to create jobs with massive new investment in public works and low-cost housing, while the extra spending would be funded by increasing tax revenue and improving tax collection process.