We Borrow A Lot Of Money Due To Insecurity Low Income Nigerian Government Says

  • Nigeria is neck-deep in debt due to the insecurity in the country, then told the Minister of Finance, Budget and National Planning, Zainab Ahmed
  • She also said that low incomes and the inability to meet the country’s OPEC quota are also to blame for why Nigeria borrows more money.
  • Ahmed admitted Nigeria’s debt profile is high, but said it is also viable but faces the challenge of service as the country is “technically at war”

Minister of Finance, Budget and National Planning Zainab Ahmed said Nigeria borrows more money due to insecurity and low income.

She also said the country had not been able to meet the Organization of the Exporting Countries (OPEC) quota for oil production in recent years.

FG: Insecurity, low income forces force us to borrow a lot of money Credit: theguardian
Source: UGC

She said this on Wednesday, January 7, 2022, during the public presentation of the 2022 budget proposal and its breakdown in Abuja.

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Low debt-to-GDP ratio

According to the GuardianThe minister insisted that Nigeria’s debt to GPD ratio is low compared to that of some African countries. As of November 2021, the ratio is 76 percent. She said Nigeria’s most pressing need is not debt sustainability but revenue.

Ahmed also said that the reason why the country has imposed an excise duty of 10 N per liter on soft drinks is to reduce the health risks associated with their consumption.

She admitted that the outstanding debt of Nigeria is worrisome and said that the budget deficit of Nigeria in relation to GDP, which was 4.3% in November last year and the rate of debt 30% in September 2021 was the lowest in Africa.

Low VAT rate, the lowest in Africa

According to her, tax rates and compliance percentages are very high in other countries.

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She also said Nigeria’s value added tax (VAT) is the lowest in Africa at 7.5%.

She said”

“To make matters worse, the country is technically at war, with security concerns pervasive throughout the country. This has necessitated massive spending on security equipment and operations, which contributes to the budget deficit. The defense and security sector accounts for 22 percent of the 2021 budget ”.

Nigeria’s debt has tripled in seven years, activist says

Legit.ng also reported that the militant human rights Odinkalu, said the debt profile of Nigeria had increased three times over the past seven years, that is to say since Muhammadu Buhari is mounted in the saddle as President of Nigeria.

Odinkalu said this in a tweet but did not explain as he only provided an undated Nigeria Bureau of Statistics (NBS) chat.

Odinkalu is perhaps not an economist, but available data from the Debt Management Office (DMO) indicate that the debt profile of Nigeria has recently risen to about 35 600 billion naira because of the increase government borrowing Buhari.

Source: Legit.ng

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