The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, urged the government to invest in infrastructure to generate revenue for the 2024 budget, News About Nigeria reports.
He said this in a meeting with the joint Senate Committee on the 2024-2026 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) in Abuja.
Edun explained that the best way for Nigeria to finance its budget is by investing in infrastructure to generate revenue.
He further stated that the current economic situation both in Nigeria and globally, does not make it wise to rely solely on borrowing.
According to Edun, Nigeria already has a borrowing profile, and the only way forward is to reduce borrowing and intercept deficit financing in the 2024 budget.
He also noted that developed countries focus on reducing rates to stabilize their economy and increase investment. In contrast, high-interest rates and investments do not go hand in hand.
He stated that expensive means are the only option left for Nigeria to secure funds. However, piling up more debts is not an option, as debt servicing already accounts for 98% of government revenue.
“If you look at government spending, if you look at the budget as a percentage of GDP, is one of the lowest being 10 per cent, even Ghana is at 25 per cent, rich ones they are 50 per cent”.
The Minister advised the government against relying on borrowing to finance the 2024 budget.
Instead, he suggested exploring investment options to generate funds for the budget.
Nigeria’s debt profile has risen astronomically since President Muhammadu Buhari took over in 2015.
