The federal government, on Wednesday, announced that it has approved a new Debt Management Strategy for the country.
This was disclosed by the Minister of Information and Culture, Alhaji Lai Mohammed; Minister of Finance, Kemi Adeosun; and the Minister of State, Budget and National Planning, Zainab Ahmed, while briefing newsmen after the federal executive council at the state house.
Adeosun said the new Debt Management Strategy will last from 2016 to 2019.
She also said the governemnt will adopt external borrowing
“We felt there was a need for a new debt management strategy and the strategy is based on the Medium Term Expenditure Framework as prepared and presented by the Ministry of Budget and National Planning.”
“That MTEF assumed that we would reduce our domestic debt from one percent of GDP to 0.7 percent by 2019.”
“The reason for this is that the government recognises that for the next three years, to really stimulate this economy and to provide the infrastructure that we need, we would need to be borrowing.”
“We need to borrow at the most cost-effective rate and beneficial terms.”
“The government recognises that there is a need to stimulate the private sector. For the private sector to really grow. banks must lend to the private sector so we don’t want government borrowing crowding out the private sector.”
“Government had taken a strategic decision that, where possible, we would borrow more externally. That is the external debts in dollars or in any other currencies because the interest rates are cheaper, the tenures are longer and there is more room for banks to lend to the private sector especially SMEs. So the strategy was approved by FEC after much debate.”