FG to Seek Foreign Loan – Kemi Adeosun

Minister of Finance, Kemi Adeosun has said Nigeria would borrow internationally and locally to fund the deficit in the 2016 budget.

Adeosun made this known in a chat with Bloomberg where she explained that the decision was considered in light of the pressure confronting the economy as a result of plunging oil prices in the global crude market.

The Minister from Ogun State stated that MTN’s fine, which has been reduced to N780 billion – over 10 percent of the budget – has nothing to do with its funding. The Nigerian Communications Commission (NCC) initially fined the telco N1.04 trillion – more than 12 percent of the 2016 budget – for its failure to disconnect over five million unregistered lines.

“We need to stimulate the economy because we cannot afford this downturn to be excessively prolonged,” she told Bloomberg.

“We think we have the headroom to borrow. We’re going to mix it between local and foreign debt. We’re talking to multilateral agencies already and we’re at an advanced stage. Then we’ll look at the foreign capital markets. “The budget will not include income from regulatory fines, such as the $3.9 billion levied on MTN Group Ltd.”

The Minister disclosed that Nigeria expects to boost non-oil revenue by N1.6 trillion in 2016, to help make up for the shortfall in earnings from crude exports. She said about N1 trillion would come from government agencies and ministries, which “have always been in the practise of not remitting funds generated”.

The 48-year-old spoke on the need to audit recurrent expenditure, which is up to N1.7 trillion in payroll alone. “If you’re spending that amount on something, you should be auditing and reviewing it. That’s a process we are just about to finalise,” she said. “The deficits in the 2016 budget – which I based on an oil price of $38 per barrel – will more than double to N2.2 trillion.”

Nigeria has a debt-to-GDP ratio of 12 percent, compared with 57 percent for Angola and 48 percent for South Africa, according to the International Monetary Fund (IMF). This feat is expected to aid the country in borrowing internationally.