The Minister of Finance and Coordinating Minister for the Economy, Wale Edun, has emphasized the need for the federal government to increase spending, stating that relying on borrowing to fund budgets is not sustainable. Edun made these remarks during his appearance before a Senate joint committee on the 2024-2026 medium-term expenditure framework (MTEF) and fiscal strategy paper (FSP), chaired by Senator Sani Musa representing Niger East.
Edun highlighted that Nigeria’s spending, in comparison to the gross domestic product (GDP), is among the lowest globally. He expressed concerns about the existing borrowing profile and emphasized the importance of reducing deficit financing in the 2024 budget. The minister pointed out that accessing funds through borrowing becomes expensive, making it an unfavorable option for sustaining government activities.
“The last thing you can think of is to pile on more debts. Government needs to not just maintain its activity, it needs to spend more,” Edun stated. He drew attention to the fact that Nigeria’s budget as a percentage of GDP is merely 10 percent, contrasting with Ghana’s 25 percent and wealthier nations that allocate around 50 percent.
In response to Edun’s presentation, Senator Sani Musa expressed dismay over revenue leakages in the economy. He raised concerns about funds generated by most Ministries, Departments, and Agencies (MDAs) not being remitted promptly, creating room for misappropriation. Musa urged the Office of the Accountant-General of the Federation to address the issue of delayed remittances and emphasized the impact of revenue shortfalls due to government-granted waivers, as highlighted in their meeting with customs.
The discussions underscored the importance of finding sustainable solutions to funding government activities without solely relying on borrowing, taking into consideration the current economic environment and global challenges.
