'Only loans can bail us out of economic crisis,' Minister says
Adeosun noted that unlike in the past, the federal government will not borrow to fund recurrent expenditure.
Minister of Finance, Kemi Adeosun, has said that Nigeria has no option than to borrow in order to invest in the economy.
The minister who was speaking on Tuesday, August 9, at a town hall meeting in Abuja said that the federal government is, however, exercising caution about its borrowing to avoid leaving a heavy debt burden for future generations.
Adeosun said: “We have a very conservative borrowing programme, and we must borrow; because to do rail — the rail that we have now was done in the colonial era — there has been really significant upgrade.
“We have urgently to do rail to enable agriculture and solid minerals to be competitive, so I really don’t see that there is any option than to borrow.
“We will borrow sustainably; we would borrow conservatively to make sure that we don’t burden future generation.”
She noted that unlike in the past, the federal government will not borrow to fund recurrent expenditure, instead its focus is on developing infrastructure.
“The difference is, we’ve been borrowing in the past to pay salaries; now we borrow to invest.
“When you borrow to invest, there is an expectation that there will be additional revenue that will service those borrowings.
“I think that is the clear difference. I don’t think people should be unduly concerned about borrowing; we have to borrow, we have no choice but we will borrow as strictly as possible.
“This is why we have approached the World Bank and export credit organisations that provide concessional loans. We are taking concessional loans before going for commercial loans,” the minister said.
Adeosun added that the size of the public sector shows that the private sector, which should be the major employer, was not developed.
She said investments in infrastructure have become imperative in order to create an environment for the growth of the private sector.