Minister of Finance, Kemi Adeosun yesterday said that despite the economic downturn, Nigeria had no choice but to borrow.
According to her, this will engender investment in the country.
She spoke at a town hall meeting organised by the Alumni Association of the National Association of the National Institute of Policy and Strategic Studies in Abuja, with theme as ‘Towards Effective Implementation of the 2016 Budget,’, where the Minister of Agriculture, Audu Ogbeh also disclosed that the federal government had concluded arrangements to restructure the Bank of Agriculture, BOA, to facilitate economic diversification in the country.
Although the federal government, Adeosun continued, is well aware and conservative about the consequences of a huge debt burden on the future generations of Nigeria, the needful has to be done now to take the country to the next level.
According to her, “We have a very conservative borrowing programme, and we must borrow; because to do rail — the rail that we have now was done in the colonial era — there has been really significant upgrade,” adding that “we have urgently to do rail to enable agriculture and solid minerals to be competitive. So I really don’t see that there is any option than to borrow.
“We will borrow sustainably; we would borrow conservatively to make sure that we don’t burden future generation,” the minister further said.
She added that the federal government would be different in its approach to borrowing this time, and would not borrow to fund recurrent expenditure; rather it wwould be to fund infrastructural development.
“The difference is, we’ve been borrowing in the past to pay salaries; now we borrow to invest. When you borrow to invest, there is an expectation that there will be additional revenue that will service those borrowings.
“I think that is the clear difference. I don’t think people should be unduly concerned about borrowing; we have to borrow, we have no choice but we will borrow as strictly as possible.
“This is why we have approached the World Bank and export credit organisations that provide concessional loans. We are taking concessional loans before going for commercial loans.”
FG to restructure Bank of Agriculture
Meanwhile, the minister of Agriculture, Chief Audu Ogbe informed at the meeting that the restructuring of the bank would provide opportunity for real farmers to become stakeholders in its operation, with a view to boosting agricultural activities.
Ogbeh said that the reform would evolve a strategy and policy that would reduce the bank interest down to five per cent, in order to stimulate food production in the country.
“We are about to restructure the Bank of Agriculture to ensure that every farmer becomes a stakeholder in the bank.
“We are coming up with a policy that will reduce the Bank of Agriculture interest rate to five per cent in order to encourage farmers to excel in agriculture.”
Ogbeh also said that the federal government would embark on awareness campaign to educate farmers on the type of fertilisers that would be suitable for their crops.
He said that the handbook produced by the ministry to educate farmers on the type of fertilisers to use would soon be made public.
On the farmers’/herdsmen clashes, the minister stressed the need for the creation of grazing reserve for headsmen as solution to the problem.
“When you give herdsmen grazing reserve, water and others things, the crisis will naturally end,” Ogbeh said.
The minister, therefore, urged all Nigerians to embrace farming as a solution to the nation’s economic problem, adding that the agricultural sector had the ability to get the Nigerian economy back on track.
“I am inviting every one of you to farm, with a view to adding value to our nation’s economy,” he said.