"We are borrowing sensibly," says the Minister of Finance.

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Nigeria Minister of Finance, Mrs Zainab Ahmed has said the Federal Government is borrowing sensibly to invest in critical infrastructure including power, water and roads.

She also added that the borrowing level for Nigeria today is still low at 23% of the GDP.

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The minister disclosed this in a meeting during a meeting with the newsmen over Nigeria’s latest GDP report which has climbed by 5.01% in the second quarter (Q2) 2021, as reported by the News Agency of Nigeria.

Ahmed said, “We are borrowing with a very close consideration to the sustainability of the borrowing. The borrowing level for Nigeria today is still 23% of the GDP.

“I have said it several times that the problem we have in Nigeria is that of revenue and when you look at the countries that are within the peer group with Nigeria, there are some that had 50 percent growth that are now at about 70% growth.”

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She also added that despite the escalated borrowing Nigeria had to deal with in 2020 and 2021 to control the economic situation badly crushed by the COVID-19 pandemic and crash in crude oil price, Nigeria revenue growth stood at 53%

“We are borrowing sensibly we are also borrowing to invest in critical infrastructure like power, water, roads and rails which are investments that are required to enhance business productivity in the country today.

“These businesses will grow, they will not only pay taxes, they will also employ people. If we don’t do this, we will regress even from where we are today. It is a necessary investment so we are borrowing responsibly,” she said.

She also added that the Federal Government is making sure that what Nigeria is borrowing is being applied to major infrastructure that will return revenue in the near future.

According to Nairametrics, Federal Government spent a total of N1.8million on debt servicing in the first five months of the year, which is about 98% of the total revenue generated in the same period.

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Nigeria Debt Management Office had revealed in June that Nigeria’s overall debt stock increased by N191 billion in the first quarter of this year, representing a 0.58% increase from N32.916 trillion as of December 31, 2020.

According to Debt Management Office, Nigeria’s total debt stock increased N33.107 trillion by the end of March 2021, up from N32.916 trillion in December 2020.

Source: Nairametrics.