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Rising crude oil price good for our economy- Minister

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Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said the rising price of crude oil is a good omen for Nigeria.

The minister said this while addressing State House correspondents on the state of the economy under President Muhammadu Buhari Thursday in Abuja.

She said gaining more revenue from the sale of crude would yield more revenue for government as well as reduce the country’s rate of borrowing.

“The more revenue we realize out of the budget, the less we borrow. As we see the oil price rising and provides us more revenue, it provides us some reliefs. We will be able to reduce our borrowing so, it is a positive thing for us,” she said.

She also assured Nigerians that government has already made provision for COVID-19 vaccines in the 2021 budget.

While justifying Nigeria’s rate of borrowing, the minister said the country’s proportion of borrowing is not misplaced because it’s to develop infrastructure not to be left behind.

“There is a lot sensitivity in Nigeria about the level of borrowing by the government and it is not misplaced. And I said earlier that the level of borrowing is not unreasonable, it is not high. The problem we have is that of revenue.

“So, what we need to do is to increase revenue to be able to enhance our debt to GDP obligation capacity. If we say we will not borrow and therefore not build rails and major infrastructure until our revenue rises enough, then, we will regress as a country. We will be left behind; we won’t be able to improve our business environment and our economy will not grow.

She said Nigeria’s total borrowing as of December 31, 2020, stood at N32.9 trillion, representing 21.6 percent of the GDP.

She explained that as of 2019, the debt to GDP ratio was 19.2 percent, stressing that only two percent was added.

The minister said there would be a supplementary budget for the 2021 national budget.

“There will be a supplementary budget, the first one will be in March relating the COVID-19 pandemic but we will also have a mid-year review like we did last year of the budget and if at the time we do the review there is a need to go back to do any amendment for supplementary budget, at that time we will take that decision, if not, we will just report the review,” she said.

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