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Saturday, 21 January 2017

Balancing The Book: No going back on planned $30BN foreign loans-Adeosun

KEMI ADEOSUN

Finance minister Adeosun says no going back on planned $30BN foreign loans as oil revenue remain weak but huge recurrent expenditure profile.
Adeosun: ''every month, I need NGN330BN'' salaries NGN210BN, debt servicing NGN120BN.


Speaking on Thursday in Abuja, the Minister of Finance, Kemi Adeosun disclosed that the low receipt of revenue from oil has made it difficult for government to fund capital projects and meet its huge monthly personnel expenditure of about N210bn, coupled with additional debt service burden of N120bn,making a total of N330bn every month.
Recall that Buhari had last year written to the senate asking for approval to borrow $30bn from foreign financial institutions.
The Senate in November 2016 had unanimously rejected borrowing plan through. It asked the executive to provide further details on it.

But speaking on the matter, Adeosun said, “Where are we today and what’s the problem? This is my requirement every month: salaries, statutory transfers every month, I need N210bn every month. Debt, not the debt that we are planning to take, but the inherited debt; I need N120bn just to service it. So, every month, I need N330bn
“Just to give you an idea of where we are today, last month’s FAAC allocation was N310bn. So, the Federal Government got about N140bn; but I must cover N330bn a month before we can do a single capital project.

“So, when we start the argument, should we borrow, should we not? The truth is that we have no choice. If you are waiting for the oil price to recover, the prognosis is that it’s not going to go back to $110 per barrel any time soon.

“So, to get the economy growing, we have no choice but to look for low-cost funds and put that infrastructure in place, because it is the infrastructure that will unlock the economy.

“It is the infrastructure that will allow us to, rather than importing powdered milk, have the cows in Taraba State with huge potential.”

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