Nigeria Is Broke need foreign loans to finance 2016 budget – Minister

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Minister of Finance, Mrs. Kemi Adeosun, has said the Federal Government will borrow internationally and locally to finance the deficit in the 2016 budget. The minister told an online publication that the development was as a result of dwindling oil prices which are putting pressure on the economy.
According to Mrs Adeosun, “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 per cent, compared with 57 per cent for Angola and 48 per cent for South Africa, according to the International Monetary Fund (IMF). This feat is expected to assist the country in borrowing internationally.
On what role the MTN fine would play in budget financing, she said  the fine, which has been reduced to N780 billion which is over 10 per cent of the budget, has nothing to do with its funding.
The Nigerian Communications Commission (NCC) late this year fined the telecoms giant N1.04 trillion – more than 12 per cent 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.
“We think we have the headroom to borrow. We’re going to mix it between local and foreign debts. 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,” the minister noted.
Adeosun said 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 not been remitting funds generated”. The 48-year-old minister 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.

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