The Minister of Finance, Mrs. Kemi Adeosun has said yesterday that the Federal Government would be prudent in the management of the country’s foreign borrowings.
Adeosun who spoke in Washington D.C. at a Joint Media Briefing with the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, at the end of the 2017 Annual Meetings of the International Monetary Fund and the World Bank Group stated that the Federal Government adopted an expansionary fiscal policy with an enlarged budget in order to deliver a fundamental structural change to the economy, thereby reducing the country’s exposure to crude oil.
Last week, President Muhammadu Buhari sought the approval of the National Assembly for another $3 billion external loan for re-financing domestic maturing debts and the issuance of a $2.5 billion Eurobond for the funding of the 2017 capital budget.
“Why are we borrowing? Mobilising revenue aggressively was not advisable, nor indeed possible, in a recessed economy. But as Nigeria now reverts to growth, our revenue strategy will be accelerated.
A statement from the Ministry said: “This is being complimented by a medium-term debt strategy that is focusing more on external borrowings to avoid crowding out the private sector. This would also reduce the cost of debt servicing and shift the balance of our debt portfolio from short-term to longer-term instruments. This Government will be very prudent around debt. We won’t borrow irresponsibly,” said Adeosun, who led the Nigerian delegation to the 2017 Annual Meetings of the IMF and the World Bank.
The CBN Governor, Mr. Godwin Emefiele, who also participated at the IMF and World Bank meetings, confirmed improvement in the Nigerian economy.
“The fundamentals we are seeing show that there is a lot of stability in the foreign exchange market, and having come down from high level to the level we are now, and the currency is just fluctuating between N359/N365 to dollar.
“We think it is good level compared to where we are coming from. We think it is important to note that as reserves get stronger, as economic fundamentals get stronger, there is no doubt that the naira will get stronger and we will see more appreciation in the currency,” Emefiele said.
He assured that the CBN would continue to focus on the banking system to ensure there were no significant threats that would affect the strategic health of the banking system.