Finance Minister Kemi Adeosun justifies Nigeria’s proposed Borrowing

We came across this video of Minister of Finance Kemi Adeosun explaining the idea behind the direction for the 2016 Budget. One of the most controversial aspects of the budget has been the planned borrowing. She defends the plan by saying the “budget is structured to invest in capital…we are borrowing to invest in capital”

She says that the key difference between now and the 2008 financial crisis is that we “spent our way out of trouble” which Nigeria could afford at that time due to the presence of cash reserves. She mentions that Nigeria also increased borrowing by 3% of GDP in 2008. She criticized previous government actions by pointing out that “we did not spend on the things that build resilience in the economy…and that is why we find ourselves back where we really don’t want to be..that’s the truth”

She says that we do not have cash and we do not have the infrastructure to drive our economy.

She remains optimistic and says the crashed oil price presents a unique opportunity for us to do the right thing…stimulate the economy and get things moving again.

She acknowledges that average Nigerian families are facing a lot of “belt tightening” and claims the government is also feeling the pinch.

Thoughts?

29 Comments on Finance Minister Kemi Adeosun justifies Nigeria’s proposed Borrowing
  • Sammie January 24, 2016 at 8:36 pm

    Borrowing puts our future children in debt at fluctuating high interest rates.

    How are we sure the funds would be judiciously used? Previous Governments invested heavily in Capital projects.

    Can we have a break down of the capital projects the loan is earmarked for?

    Has the Senate read the terms and conditions of this loan? Have they even had debates addressing it’s pros and cons? Or cheaper alternatives for the nation? I think it’s time constituents start recalling some senators as they don’t seem to do anything tangible.

    • Onyie January 24, 2016 at 9:11 pm

      Hi Sammie, what cheaper alternatives will you propose if you were a senator?

      Really interested in your thoughts on this.

      • Nwa nna January 24, 2016 at 11:38 pm

        @onyie, you cannot borrow yourself out of an economic crisis.. Ask Greece!
        FGN needs to drastically cut back its reoccurring governmental spending immediately, and I mean drastically! From what I read & please correct me if I’m wrong, the reoccurring expenditure to run the FGN hovers at about 80% of the annual budget and this is unsustainable in any economy and for lack of a better term fvcking insane!!!
        If PMB and his team are really serious about getting Nigeria out of this mess, oil prices will continue to drop so now is the time to dig deep within and aggressively start developing other income generating sectors within the Nigerian economy…

  • ajikoko January 24, 2016 at 8:40 pm

    I Dey feel the pinch….No JOB,na my mama dey give me money.

  • Someone Naughty January 24, 2016 at 8:58 pm

    Dear Buhari’s Administration,

    We get it, the previous government is to blame for everything, even for your own existence. All we are asking is that you get to work already, stop apportioning blame and take responsibility for something.

    It is appalling that 6 months in, when anyone in this present administration speaks, they are still blaming the previous. Please get to work. You clearly did not map out any economic policies or even ruling strategies prior to assuming office which is what any sane political party coming into power does. It is called planning.

    We the Nigerian people are tired of your crying. We are the ones bearing the brunt of it all and we know those CBN policies are just the beginning.

    • Tosin January 25, 2016 at 12:35 am

      It’s not six months in. Elections March, inauguration May 2015.

    • Cindy January 25, 2016 at 6:46 am

      I knew one of you would say this. The journalist who wrote this was the one that used the word ‘criticized’ merely looking for controversy. Go back and read before you jump on the band wagon. Kemi said ‘we’……meaning everyone of us including she herself. So please try to be open minded next time will ya? Instead of looking for faults in every statement.

  • Bruno fierce Two January 24, 2016 at 9:07 pm

    It is funny we keep resorting to borrowing and incurring costs and giving excuses. I am not convinced please, we can find other alternatives. We should ask ourselves “These capital projects when will they be completed”, “Can we survive before the projects start yielding for the country” Interest rates and clauses for borrowing, how would this affect the nation?. If Buhari leaves, will the next government continue with the projects or borrow more and talk about how the capital projects are not viable” Please Nigerians lets start asking questions..

  • nene+ January 24, 2016 at 9:53 pm

    Govt feeling belt tightening? I doubt!!!
    580 million to 1.7 Billion
    24 million to 317 wild life feeding in aso?
    3.9 billion aso renovation???
    59% increase in junketerring allowance
    A total of 53% increase in all spheres?
    These are certainly not belt tightning….
    The so called capital is a merger 30% increase from the previous year. Kemi I hope that you guys salvage the economy without further waste of time. Things are really bad due to prolonged vaccum of ministerlessness and lack of economic blueprint even after the ministers came.

    Now that you are here start doing and stop talking. The debt is my fear. Too much for a fiscal year!!!
    Buhari and APC has no moral for increasing government expenses on themselves…..this is a shame and a big one to all the silent fearful followers.

  • EntertainDhood January 24, 2016 at 10:09 pm

    Nigeria needs serious prayers because we are ruled by confused set of people

  • kikiki January 24, 2016 at 10:10 pm

    Turn to your neighbour and say“ neighbour,have you blamed GEJ today???”

    Stupidity at its peak!!! Audu Ogbe blamed Agriculture on SAP and IBB, Isaac Oduwole blame Lassa on GEJ, una no dey shame??

    Kemi that couldn’t even get the budget right??

  • ‘Deola January 24, 2016 at 11:38 pm

    Iweala took us on a fictitious ride, I do not trust Adeosun either. Both are different sides of the same worse economic coin. ” The Emiratis, abi ? Built their economy” That’s now the Nigerian model, model castle and ocean in the desert.

    Our generation will never experience the benefits of capital investment. Imagine building a house. It takes about 9 -18 months ifyou have all the ready resources. I wonder how many months it will take to build infrastructure. Buhari go don finish term before that kain infrastucture go ready. Rail, roads, electricty, refinery, abeg you name it.

    Anyway, I know say in the mean time make dem just dey talk and act busy. Oil price takes 4-5 years to go back to ‘historic highs.’ For now, make we dey discuss budget deficit, free meals for indigent kids and all worth nots . Awon ole rada rada!

    • Anon January 25, 2016 at 9:34 am

      Why do you just throw accusations based on propaganda? How did Iweala take you ( Nigeria) for a ride or whatever it is you accused her of? Where were you when she was taken to court by your governors of change – Amaechi, Fashola and Oshiomole because she insisted that money must be saved for the rainy day and for is using on starting the SWF with funds from the excess crude account? Where were you when the money was shared according to the constitution and the governors collected their share of money and it disappeared? Nigerians hate to tell themselves the truth and until then you will keep going round in circles. All the systems to check leakages was instituted by Iweala yet people like you open your mouth motivated by whatever sentiment to accuse her. Anyway the suffering never start for Una as for me ‘sips’ and more popcorn.

      • FasholasLover January 25, 2016 at 11:49 am

        Tell her. Some commenters here be commenting just ‘cos they hv free data. Amnesia aplenty.

  • Darlington January 24, 2016 at 11:51 pm

    Okay.
    Please, click mah website

  • mywifeisfiiiiiiine January 24, 2016 at 11:59 pm

    What worries me so much is the deafening silence from the media and Nigerians in general. These president is more than clueless, you all thought jona was clueless; Sai baba takes the cake.

  • nnenne January 25, 2016 at 12:01 am

    How about all the money they, allegedly, have been recovering from the previous administration?
    What are they doing with them?
    What are these capital projects, how much would they cost and what time line will they be completed?
    We need more transparency, please!

  • sammie January 25, 2016 at 1:39 am

    @Onyie In response to your request. Since the Objective is Capital Project financing, I would need to view a breakdown of all the Capital Projects the Minister is seeking loan financing for. We would list them in order of priority with possible elimination if possible. The alternatives to taking loan financing for these Capital Projects are:
    Public Private Partnership: The FG could partner with Private investors to develop sustain and maintain these projects whereby the FG gets a stake in the profits.
    Commodity Exchange: FG could partner with China, India and Russia whereby they could aid in developing our Infrastructure in exchange of our commodity over a mutually agreed period of time.
    Coffee Processing: We could partner with Starbucks International to develop cocoa processing plant with the idea of giving them an equity stake in the project. We would grant them some import waivers and tax breaks. In return they would employ Nigerians with the objective of Knowledge transfer. They would only seek local contractors when contracting to service their local supply chain.
    States: All state Governors should develop 20 economically viable ideas that could make their state autonomous and raise their respective IGRs. They should come up with creative ways of sourcing financing with the goal of creating employment and empowering the youth.

    It might be a bit ambitious but this are some of the ideas that come to mind…..

    • Onyie January 25, 2016 at 10:18 am

      Hi @Sammie and @Nwa nna i completely agree with your points (some of them at least – coffee processing plants?! Just kidding) There are alternatives to borrowing and i completely agree that the level of proposed borrowing is too much and may even land us in deeper trouble.

      I like your PPP idea – that’s a viable one. @Nwa nna also mentioned digging deeper for IGR avenues and that’s what i was thinking about. We should be looking at exports as a means of generating revenue and stimulating the economy – this was one of the strategies employed by China and it worked for them. We have a lot of natural resources in this country going to waste and PMB should be concentrating on establishing trade relationships through all these his trips rather than concentrating on stolen funds! This particular venture of his really works me up so i shall stop here.

  • common sense January 25, 2016 at 3:47 am

    Nigeria does not have the money to develop, the only way that could happen is to borrow and industrialize Nigeria, so that the debts can be paid in years to come, At that point the Nigeria is set and developed and every industry are working great while new are being created to compete in the global stage. borrowing little amounts here and there over and over won’t do jack.

    this is the rock bottom (close at least) we’ve got nothing to lose but before then we need to rid the bastards and thieves and re-orientate the citizens starting younger ages at schools.

  • californiabawlar January 25, 2016 at 3:48 am

    Looks like the new Diezani to me…hehehe!

    Borrow o! steal oh! make una sha do something! talk talk talk talk talk….

  • zoranx January 25, 2016 at 4:15 am

    How can she justify borrowing ,it is a pitty that this guys do not have any laid down plan before asuming this office,january is gone we still dey talk about budget and arms deal.better gets to work already. ndiala….please join me here zooranx.com/zoranx

  • FasholasLover January 25, 2016 at 9:30 am

    Can the real Minister of Finance pls. stand up? Kemi is just a figure head. The Minister of Finance is the one with the NEPA bill cert. Any wonder why we are in a quandary? The 2016 budget is a National hot pot of mess. The media has gone mute all of a sudden and no one is asking questions. When everything regarding governance is shrouded in secrecy, it is either of two things. You are incompetent and do not want your inadequacies exposed or you are a criminal. Buhari and his govt reeks of both. While Buhari has his nose in the air sniffing out corrupt politicians, his house is crumbling right under him. Don’t tell me about suffering before smiling except you are born to suffer. I think those who should be asking questions now know that Buhari is a monumental mistake. 2019 campaign starts next year. Should be interesting to see daggers drawn.. Then, we shall begin to hear the truth.

  • ifeanyi January 25, 2016 at 10:55 am

    Buhari would change this Country in Fundamental ways…Look at His actions and motive…and you would see guts in Him

    At least, we can refine our own Oil, Feed ourselves…and the fear of stealing would be the beginning of Wisdom!

    God, in His merciful grace, brought Him at a time like this! It is not important He is loved! In Leadership, especially in Nigeria…It is more important to be feared than to be Loved.

    He has nothing to lose! He is 73 or so…Nigeria has nothing to lose! Oil has reached rock Bottom…Nigeria is Broke…

    This is a Privilege time…This country would be changed in fundamentals ways…and if you are wise, look for the opportunities…

    Nigeria would stoop to conquer!

  • prince January 25, 2016 at 5:01 pm

    Lets be true to ourselves. Buhari and his ministers has no single blame in this and we should be thankful that God brought this man in. If GEJ had won we will be in deep shit cos those people were bunch of liars. Lets be grateful that God gave us a government that is telling the truth and making us understand the situations on ground.
    The last administration was a curse on this nation. I know what I’m saying and I’m not asking anyone to believe me but I sure know some people.
    The present Emir of Kano told them about this very problem we are in in 2011 or 2012, Madam Okonjo Wahala was right there and they did nothing. All they did was loot and empty the treasury.
    Whatever you’re doing, just remember one thing, you will sure answer to everything someday before your creator.

  • justsayying January 25, 2016 at 9:20 pm

    No refineries are working, both packed up a few days ago!
    In 2016, we are still wishing and hoping!
    we the electorate are to blame for all of this. We had no business instituting someone with little or no knowledge of the current times!
    As a Nigerian, i will say
    God help us all!

  • Samira January 25, 2016 at 11:18 pm

    Diploma Kemi. Belt tightening is one thing. Aimless drifting into sharp decline is another. Naira at 305 to dollar should normally encourage foreign investment in industries. It can’t because Buharinomics won’t let companies move their profits. Yes PROFIT is not a dirty word or a crime to people that work for gain. Nobody has asked Buhari to explain what he did with Nigeria’s money in his months of hijacked hiatus pre-appointing ministers. Then again, is VP Osinbajo no longer heading Nigeria’s economic team effectively making Professor Yemi Osinbajo the coordinating minister for economy? Why send Diploma Kemi to drop the dirty when he should take responsibility? Responsibility is not only for photographs and platitudes. This government does not understand the concept of shoring up confidence to stimulate the economy. Worse times ahead.

  • ElessarisElendil January 26, 2016 at 1:47 am

    What are you people on about??? Borrowing is very very very very very easy to understand.

    1. Country borrows.

    2. Country does the sane thing and invests in infrastructure.

    3. Infrastructure construction hires some of its citizens, others provide ancillary services. Either way people are earning MONEY!!

    4. Country’s citizen’s spend that money, making the economy churn along.

    5. Country’s brand new infrastructure is completed increasing the economic viability of the country, country invites in Foreign investment, the workers who worked on the infrastructure project instead of having atrophied skills easily transfer to the MNCs.

    6. Country wins, citizens wins, everybody wins.

    We could do that…………..like all sane governments have figured out since the great depression

    or we could “cut costs” because some people don’t understand that a national debt is a vital part of the economy, which will lead to:

    1. People get fired.

    2. People don’t have money.

    3. Said people don’t spend their non-existent money on others, the others too don’t have money and on and on until we all don’t have money.

    4. We start taking money by force from the few that have.

    5. Everybody loses.

    Ehh I blame the government, they should have sensitised the nation in a people friendly manner on the perks of borrowing. The win win is not having the people vote, they can be short-sighted.

  • Jamce January 26, 2016 at 11:51 am

    @Sammie, your head is very correct. Don’t mind the lazy heads that are called politicians who are just looking for ways to borrow and steal us blind. It is not rocket science to get things right. PMB and APC are all gang of fraudsters with the highest integrity deficit which they want to transfer to our national budget.

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