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.