New Telegraph

Borrowing Cannot Be Totally Avoided, Says Akpabio

…Insists Borrowing Trends Must Be Checked

The President of the Senate, Senator Godswill Akoabio, on Thursday, posited that in view of the current economic realities in Nigeria, the country could not totally avoid borrowing to fund her numerous development projects.

Akpabio stated this at an interactive session of the Senate Committee on Finance with ministries, departments and agencies (MDAs), on the 2024-2026 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

He however, stressed that it had become apparent that the borrowing trends in the country could not be allowed to continue unchecked, saying that conscious efforts must be made to reduce budget deficits in the nation’s subsequent appropriations.

He noted that the 2024-2026 MTEF/FSP was being considered at a time when events on the global scene and locally, were putting massive negative financial and socio-economic pressure on Nigeria from most development indices.

The lawmaker stated that, internationally, the intractable Russian-Ukraine war and the sudden Israeli-Palestine war were having international economic repercussions that had consequences for the nation’s economic outlook.

Akpabio argued that, for Nigeria to achieve a balance to reduce budget deficits, required the country to look inward towards increased revenue generation, block leakages and place restraints on what were generally frivolous expenditures by MDAS, particularly the Government Owned Enterprises (GOES).

He said, “The 2024-2026 MTEF/FSP is being considered at a time that events at the global scene and locally, are putting massive negative financial and socio-economic pressure on Nigeria from most development indices. Internationally, the intractable Russian-Ukraine war and the sudden Israeli-Palestine war are having international economic repercussions that have consequences for our economic outlook.

“In addition, we are in the throes of the immediate effects of needed reform in our foreign exchange system and the equally needed removal of subsidy on petroleum products. Coupled with the security challenges confronting the nation, there is no doubt that we must be painstaking and bold in economic projections and policies to stimulate employment and economic growth.

“While we acknowledge that the majority of our people are going through very difficult times in their daily lives at present, we are very hopeful that in the medium term and in the long run, the Nigerian economy is bound to rebound for relief to the majority of our people.

“In pursuant of this goal, I want to encourage frank and honest discussions of all the parameters and indices contained in the 2024-2026 MTEF/FSP. We must not shy away
from confronting the economic challenges facing the nation and the 2024- 2026 MTEF/FSP should be a platform to guide our subsequent actions.

“Given the progress made in our public finance with the reforms of our financial system through the passage of four Finance Acts (2019, 2020, 2021 and 2022), we must continue to bring our financial legislation up to speed for increased revenue, removal of ambiguities and redressing socio-economic imbalances to favour the downtrodden.

“There is no doubt that the passage of the various Finance Acts is yielding results for government revenues and providing succour for the low-income earners and small and medium scale sectors of the economy among other fiscal and regulatory benefits. We are hopeful that the reforms and future enactments will continue to bring our financial legislation up to date.

“In view of our current realities, borrowing cannot be totally avoided. However, it is apparent that the borrowing trends cannot be allowed to continue unchecked and conscious efforts must be made to reduce budget deficits. Achieving a balance to reduce budget deficits requires us to look inward towards increased revenue generation, blocking of leakages and restraints on what are generally frivolous expenditures by MDAS, particularly the Government Owned Enterprises (GOES).

“We are convinced that the GOES can do better in terms of revenue and it is noteworthy that various reforms are being introduced to centralize the channel of payment of revenues by these agencies to the Consolidated Revenue Fund of the Federal Government.

“On this note, I hereby declare this interactive session open and look forward to a robust session and a report for the consideration and approval by the Senate.”

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