With the outbreak of the deadly coronavirus completely unsettling the world’s economy and the price of crude oil plunging to the lowest level since 2016, the Minister of Finance, Budget and National Planning, Zainab Ahmed, has announced that the federal government has suspended its $22.7 billion external borrowing plan.
The minister confirmed this while speaking in Abuja at the 2020 International Conference on the Nigerian Commodities Market organized by the Securities and Exchange Commission, SEC.
She said that the decision to abandon the plan was taken due to the current realities in the global economic landscape.
With an economy largely dependent on oil revenues to finance the budget, the unprecedented crash in oil prices below the approved benchmark price of $57 per barrel has rendered the approved estimates in Nigeria’s budget unrealistic.
Mrs Ahmed, however, said that the government would not be keen to proceed with the borrowing plan even if the National Assembly gives the approval.
“The current market indices do not support any external borrowings at the moment, despite that the parliament is still doing its work on the borrowing plan.
“One arm of the parliament has completed their work, and the other arm is still working. So, it is a process controlled entirely by the parliament itself. We are waiting,” she said.
The minister, while noting that the government will defer the borrowing plan and watch the market till the timing is right, said that the government would continue to focus its efforts on its plan to diversify the country’s economy.
The government’s resolve to diversify the national economy has further been reinforced by the outbreak of the coronavirus pandemic and the oil price wars in the international oil market.
She noted that the current problems facing the global economy have brought about the need for Nigeria to focus her attention on the development of a non-oil attitude to everything.
The minister stressed that the federal government would prioritize its spending on major capital projects that would have greater impact on job creation, visibility as well as enhance the ease of doing business in the country.
She stated: “The expenditures that are not critical must be deferred to a later date when things become more normal.
“Several national plans, programmes and projects have been directed at diversifying the production and revenue structures of the economy,” she said.
Stressing the need to do more to boost production and exports base and provide more opportunities to the teeming population, she noted some achievements in the areas of production and revenue generation.