It has been revealed by the National Assembly that in a country battling economic recession, the government must spend money to reflate the economy and invest heavily in infrastructure to exit the recession.
The leadership of the House of Representatives said on Sunday that Nigeria had no choice but to borrow money to fund the 2017 budget.
Amid the scarcity of resources to achieve the goal, the House said seeking financial help from within and outside the country became unavoidable.
The Majority Leader of the House, Mr. Femi Gbajabiamila, gave this position in Abuja, while speaking on the activities of the legislature in the last 12 months.
President Muhammadu Buhari had on Thursday last week laid a budget size of N7.298tn before a joint session of the National Assembly for 2017.
But, the budget of “economic recovery and growth” came with a deficit of N2.36tn.
Meanwhile, It’s projected revenue of N4.9tn is far less than the expenditure projections.
To finance the deficit, Buhari had said that he would borrow N2.32tn.
Out of the loan, N1.06tn will be external loan. Another N1.25tn will be sourced within Nigeria.
The Senate and the House have yet to approve a $30bn loan request by Buhari, though the President included the loan as a funding window in the budget.
However, Gbajabiamila explained that Nigeria must borrow because the country was not making money like before.
He revealed that crude oil, the country’s mainstay, had been negatively affected by two factors since 2015 – a dip in global prices and pipeline vandalism by Niger Delta militants.
The lawmaker from Lagos State said, “Nigeria can’t do without borrowing, especially when you run a deficit budget.
“There is a lot we need money to spend on, but we are not making the money as before. The oil we rely on has gone down. We must now go out and borrow.”
He dispelled the speculation that the Chinese government was unwilling to offer part of the loan to Nigeria on the grounds that the latter had approached other Asian neighbours for the same help.
Asked whether his explanation suggested that the $30bn loan request would be approved by legislators, Gbajabiamila replied that work was progressing on it and would be finalised as soon as members reconvened from the Christmas break on January 10.
Chairman, Senate Committee on Media and Public Affairs, Senator Sabi Abdullahi, in an interview with one of our correspondents on Sunday, stated that the legislature was never opposed to borrowing by the government as long as the purpose was clear.
Notwithstanding, the Senate has expressed its readiness to support the borrowing plans of President Muhammadu Buhari’s administration in the finance of the N7.298tn 2017 budget.