Wednesday, 14 October 2020 05:44

FG states reason why Nigeria won’t apply for IMF debt relief package

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International Monetary Fund (IMF) is pushing debt relief for low income countries. However, Nigeria will not be applying for relief to get out of its crippling N31 trillion debt burden.

Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, made this disclosure on Tuesday in Abuja during the public presentation of  2021 budget.

Responding to a question whether Nigeria would take the option of the debt relief, Ahmed said the government was not considering such at this time.

She said several loan agreements have been entered with various lenders, asking for debt relief would portend Nigeria as a country that cannot repay its indebtedness in the eyes of creditors.

The Minister also defended 2021 budget deficit which has exceeded the Fiscal Responsibility Act threshold of three percent.

President Muhammadu Buhari had presented a budget proposal of ₦13.08trn up by 22.9 per cent from the ₦10.8trn 2020 budget, with revenue projected at ₦7.5trn.

The budget deficit is projected to grow by ₦5.21trn made up of Government Owned Enterprises and project-tied loans thus representing 3.64 percent of the budget size.

The ₦5.21trn budget deficit exceedes the three per cent threshold prescribed by FRA 2007 for the annual budget.

Ahmed said that although 2021 budget deficit exceeded the three per cent threshold, the government has not breached the law.

She said that there is a provision in the Fiscal Responsibility Act that allows the government to surpass the threshold during “unusual times.”

 

The Nation