Fresh $800m Loan: Budget Office Say FG Fast Exceeding ‘Already’ Shrunk Borrowing Space
The federal government led by President Muhammadu Buhari, has
been described as fast exceeding its already shrunk borrowing space.
The DG, Budget
Office of the Federation, Ben Akabueze, on Wednesday at the induction of
newly-elected lawmakers of the 10th National Assembly, which took place at the
International Conference Centre (ICC), in Abuja.
Akabueze said that
“While the size of the FG budget for 2023 created some excitement, the
aggregate budgets of all governments in the country amount to about 30 trillion
Naira, that is less than 15 percent in terms of ratio to GDP.
“Even on the African
continent, the ratio of spending is about 20 percent. South Africa is about 30
percent, Morocco is about 40 percent and at 15 percent, that is too small for
our needs.
“That is why there
is a fierce competition for the limited resources. That can determine how much
we can relatively borrow. We now have very limited borrowing space, not because
our debt to GDP is high, but because our revenue is too small to sustain the
size of our debt. That explains our high debt service ratio.
“Once a country’s
debt service ratio exceeds 30 percent, that country is in trouble and we are
pushing towards 100 percent and that tells you how much trouble we are in. We
have limited space to borrow.
“When you take how
much you can generate in terms of revenue and what you can reasonably borrow,
that establishes the size of the budget. The next thing would be to pay
attention to government priority regarding what project gets what.
The budget is not a
shopping list. In the end, the budget only contained expenditure”.
Comments
Post a Comment