The Nigeria government said it is reducing capital expenditure target from 30 per cent to 26 per cent in an effort to curb rising debt profile. The recurrent expenditure however is expected to grow by 34 per cent due to expenses that were left from 2003 and consideration for the new proposed minimum wage.
Udoma Udo Udoma, Minister of Budget and National Planning made this known in Lagos at the Deloitte in Dialogue Nigeria Economic Outlook 2019 which held on Thursday, 31 January.
The minister’s announcement is the first open indication that the government is worried at its current debt profile which as at December 2018 stood at N824.82 billion for domestic borrowing and N824.82 billion for foreign sources.
“We are currently spending more than 70 per cent of our revenue on salaries which is not sustainable,” Udoma Udo Udoma said during his presentation at the event organised by Deloitte Nigeria.
He noted that at current levels of population growth Nigeria is likely to struggle should economic growth not align with the realities.
Zainab Ahmed, Minister of Finance however pointed out that Nigeria’s borrowing is still within very good fiscal limits.
“The problem we have is that of revenue,” says Ahmed. “The prioritization of revenue is a must for all of us as an administration.”
A shift from mentality of expenditure to that of revenue generation, for her, is critical to drive the ministries and departments and attain the target for 2019 budget.
Details later…
