The chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, has defended the Federal Government’s borrowing plan.
He stated that “loans remain a legitimate part of Nigeria’s budgetary framework even when revenue targets were met.”
Speaking during the Meet the Press session, Adedeji argued that borrowing should not be viewed as a failure in revenue generation but rather as a typical part of a country’s fiscal plan.
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He posed a question to illustrate this point: “What is the component of a budget of a country? You have expenditure, revenue and loan in all budgets. If my expenditure for the year is ₦100,000 and my plan is that ₦80,000 is from revenue and I will borrow ₦20,000, and I have done ₦80,000 in revenue and borrowed ₦20,000 according to my budget, what is the problem with that?”
He stressed that borrowing was part of the economic ecosystem globally, adding that “no individual or government survives solely on income without credit support.”
He said, “Borrowing is not a problem. Banks are part of our economy. There is no country or individual in the world that survives based on its own income. When government borrows from banks, we pay interest. It is from that interest banks pay salaries, from salaries they pay taxes to state governments, and from profits I collect taxes.”
Adedeji added that borrowing for infrastructure projects is a sustainable economic strategy because future tax collections from those who use the facilities help repay the debt.
Adedeji explained that the Bola Tinubu administration has already stopped the controversial “Ways and Means” practice of printing money.
The outstanding loans are now properly recognised as Federal Government debt.
He said, “If you remember, one of the decisions of Mr President is to collateralise Ways and Means. We stopped printing and the whole loan is taken as Federal Government loan. We are paying principal and interest, and that is why you have stability in the system and no pressure on the exchange rate.”
He also questioned if the government was borrowing outside what is approved by the National Assembly, adding that loans are part of the submitted budget.
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