Zainab Ahmed, the minister of finance, budget and national planning, says the country’s debt service to revenue ratio is higher than desirable.
Ahmed was speaking on Tuesday during a presentation before the house of representatives committee on aids, loans and debt management in Abuja.
In her presentation, the minister said the federal government’s intended $22.71 billion loan will be gotten from multilateral and bilateral lenders which would be concessional or semi-concessional and long-tenured.
This, she said, is in line with the debt management strategy which aims to replace short-term high-interest domestic debt with low-interest long-term external debt to moderate the level of debt servicing.
“Nigeria, by the Fiscal Responsibility Act, has a ceiling of 25% on the total debt stock to GDP, and this borrowing will still see us stay within those thresholds. The ratios as of December 31, 2018, and June 30, 2019, were 19.09% and 18.99% respectively.
“The debt service to revenue ratio, however, is high; it has been higher than desirable and provides strong justification for the current drive to increase both oil and non-oil revenues to enable more adequately resource government and service our debt obligations.”
Other people who appeared before the committee were Babatunde Fashola, minister of works and housing, Gbemisola Saraki, minister of state for transport and Patience Oniha, director-general od the Debt Management Office (DMO).