Nigeria’s domestic debt
will rise this year as Africa’s biggest economy borrows more to
meet a shortfall in revenue caused by the plunge in the price
of oil, its main export, finance minister, Ngozi Okonjo- Iweala,
said, reports Bloomberg.
“‘Our income is still
coming from a source that is not diversified,”
Okonjo-Iweala told a conference Tuesday in the capital,
Abuja. “Because of the drop in oil prices we will have a
difficult year.”
The additional
domestic debt will go toward paying the salaries of
government employees, she said.
“You cannot throw
people out on the streets.” Nigeria, Africa’s biggest oil
producer, depends on crude exports for 70 percent of government
revenue and more than 90 percent of foreign income, making
it vulnerable as prices plummeted more than 50 percent since
last year’s peak in June.
Pressure has mounted on
the naira, which has weakened 7.5 percent this year, the most among
24
African currencies tracked by Bloomberg.
“A year ago before
the fall in prices we said that we should save but we were
not listened to,” Okonjo-Iweala said, referring to lawmakers who
had opposed her moves to use a lower oil price for
budgeting and save the rest. “Today they’re saying we didn’t save.”
Nigeria, which is
facing rescheduled presidential elections on March 28, trimmed
spending by 8 percent and reduced the proposed benchmark oil
price twice, before settling for $65 a barrel in December.
Planned capital
spending of N634 billion ($3.2 billion) this year is 15 percent of
the total budget of N4.36 trillion, with recurrent
spending, including salaries and overheads, representing about 80 percent.
The amount to be
borrowed will “now depend on the final scenario” adopted
after talks with lawmakers this week, Okonjo-Iweala said.
“Then we’ll know
exactly how much more debt that we’ll raise.”
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