The acting Accountant General of the Federation, Mr Anamekwe Nwabuoku said the country cannot continue borrowing to augment salary payments.
Speaking at a retreat for the Technical Sub-committee on Cash Management (TSCM), the acting AGF said “We have to borrow to augment our salaries. We are in a very difficult time. Government income is highly challenged.”
Speaking further, he added that “Records available indicate that due to dwindling revenues, the Treasury had to resort to other sources in order to augment for the payment of Federal Government Public Servants! There is an increase in government expenditure due to increasing security challenges and social needs of the citizenry.
However, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, is concerned that the federal government’s payment of petrol subsidy regime was hurting Nigeria’s ability to service its debts.
Speaking at the launch of the World Bank’s Nigeria Development Update in Abuja, Zainab said: “This premium motor spirit (PMS) subsidy is costing us an additional N4 trillion than was originally planned. So, this is an unplanned deficit. Already we have borrowing increasing significantly and we are struggling with being able to service debt.”
Reacting to the development, Lead economic consultant to the Economic Community of West African States, (ECOWAS) Prof. Ken Ife said rather than boosting the government’s revenue drive, the Nigerian National Petroleum Company (NNPC) is further compounding the debt situation.
“NNPC is asking the federal government to borrow N4tr to service subsidies, where will they get that money, don’t forget this is in addition to recurrent expenditure consisting of salary and pensions.”
He urged the government to improve the revenue mobilization strategy from 7% to 15% of GDP by 2023.
An economist at SPM Professionals Mr Paul Alaje warned against borrowing to consume saying the rising unsubstantiated subsidy spend is worrisome especially in the face of burgeoning corruption in managing government revenues.
“The question again is, should we continue to borrow to finance a budget that is not impactful on the economy? The answer is a NO,” he said.
a lecturer at the University of Nigeria Nsukka, Mr David Akwu said the subsidy regime is a disaster for the economy. “How much fuel did we consume to have spent N1tr on fuel subsidy.”