Finance Minister Wale Edun informs the Senate that Nigeria may still require additional borrowing despite improved revenue performance from some agencies, highlighting fiscal challenges.
Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, states that despite some Ministries, Departments, and Agencies exceeding their revenue targets, the Nigerian government still requires additional borrowings to finance its budget.
Edun made this statement at an interactive session held by the Senate Joint Committees on Finance, National Planning, and Economic Affairs regarding the 2025-2027 Medium-Term Expenditure Framework/Fiscal Strategy Paper.
He stated that borrowing should be carried out productively and efficiently, with the Senate’s approval, to ensure proper budget funding.
The revenue efforts have been commendable, but there’s still room for improvement. Meanwhile, we need to borrow in a productive, effective, and sustainable manner to invest in the Nigerian economy.
Edun stated that it isn’t only about infrastructure; it’s also crucial to focus on social services, health care, education, and interventions for social safety nets to assist the poorest and most vulnerable.
For a similar reason, the Minister of Budget and Economic Planning, Senator Atiku Bagudu, reminded lawmakers that the borrowing plans outlined in the N35.5 trillion 2024 budget were mainly intended to cover the N9.7 trillion deficit.
Although some revenue-generating agencies have exceeded their targets, the government still needs to borrow funds to adequately support the budget, especially in addressing deficits and enhancing productivity for the poorest and most vulnerable populations.
“We have a long-term development plan, Agenda 2050, which aims for a GDP per capita of $33,000,” Bagudu explained.
At the same time, both the Economic and Financial Crimes Commission (EFCC) and the Revenue Mobilization and Fiscal Commission assert that if the Federal Government is truly committed, borrowing to finance the national budget would be unnecessary.
Ola Olukoyede, the Chairman of EFCC, informed the committee that over N197 billion has been recovered since January 2024. He emphasized that if the government puts in substantial effort and secures adequate collections from IOC’s, there would be sufficient funds to support the national budget.
Bashir Adeniyi, the Comptroller General of Nigeria Customs Service, revealed in his presentation that the Customs has generated N5.352 trillion in revenue, surpassing its 2024 fiscal year target of N5.09 trillion.
He mentioned that the projected revenue for 2025 is N6.3 trillion, with a target of increasing this by 10% for 2026 and an additional increase of 10% set as the goal for the fiscal year 2027.
The Group Chief Executive Officer of Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, stated in his presentation that the company surpassed its projected 2024 revenue target of N12.3 trillion by already generating N13.1 trillion.
He stated that for the 2025 fiscal year, NNPCL is expected to remit N23.7 trillion into the federation account.
Zacch Adedeji, the Chairman of the Federal Inland Revenue Service (FIRS), informed the joint committees during his presentation that FIRS had exceeded its revenue targets in all tax categories.
On Thursday, the Senate approved President Bola Tinubu’s request for a ₦1.77 trillion ($2.2 billion) loan following a voice vote.
The Senate, under the leadership of Deputy Senate President Barau Jibrin, approved the loan following a report presented by Senator Wammako Magatarkada (APC, Sokoto North), who chairs the Senate Committee on Local and Foreign Debts.
On Tuesday, the President submitted a request as part of a new external borrowing plan to help finance part of the N9.7 trillion budget deficit for fiscal year 2024.
Tinubu’s new loan request has sparked criticism among some Nigerians, notably from the opposition. Former Vice President Atiku Abubakar labeled the loan proposal as “bone-crushing” for Nigerians.
Atiku has criticized the initiative, stating that he believes the loans are not beneficial to Nigerians.
In a post on his X handle Thursday, Atiku stated that the loans taken by @officialABAT are severely burdening Nigerians and putting immense strain on the economy, particularly when they are not properly negotiated or utilized.
It is troubling that the insatiable demand for these enormous loans is driven by corruption rather than genuine infrastructure and development needs. According to a report from Budgit, a budget watchdog organization, the 2024 Budget has become chaotic due to its excessive allocation of funds for unnecessary projects.
He alleged that the National Assembly was “an accomplice once again.”
Peoplesmind
