Nigeria Facing Challenges In Generating Enough Income To Fund Budget

Nigeria is facing challenges in generating enough revenue to finance its 2018 budget in the face of poor non-oil performance, minister of finance has said.

According to Zainab Ahmed, the government has put in place strategies on how to finance the 2019 budget of 8.83 trillion naira with mixture of debt from domestic and foreign sources.

Ahmed, who appeared before the National Assembly committee on finance to defend his ministry's budget said the government plans to tap concessionary long-term loans to finance its 2019 budget in addition to borrowing at home,

“We intend to fund the 2019 budget through borrowing locally and internationally with a spread of 50:50. Our focus is on concessionary long-term loans,” said the finance minister.  

Nigeria, Africa's biggest economy has borrowed about $10 billion through Eurobond from the International Capital Market (ICM) since  2016 to fund its budget in the face of fluctuating global oil price and low crude out[ut.

Head of the Debt Mangement Office (DMO), Patience Oniha recently said Nigeria’s major priority now is to reduce debt-service costs bt shifting attention from external borrowing to domestic debt.

“If you were to ask me if we’re going to issue Eurobonds this year, I’d say we’ll explore all the options.

 “Our preferred option is to explore concessional sources. One of our major objectives is to reduce debt-service costs,” Oniha said in a recent interview, indicating the country's move to borrow cheap from the domestic market.

With the cut in the Central Bank of Nigeria's (CBN) benchmark interest rate, cost of borrowing from the domestic debt market should trend downward, lower borrowing cost for the government and help it to achieve its objectives of reducing debt service.

On Tuesday the central bank cut its benchmark interest rate for the first time in four years by 50 basis points to 13.5 percent to try to stimulate growth.

, a move which could also 

The West African country earn the bulk of its revenue from crude oil export and had made efforts in recent to diversify revenue sources, but this has achieved little as bureaucratic bottleneck and corruption has hampered reforms in the sector.

The central bank has said GDP growth could pick up in the first quarter, buoyed by election spending and this year’s government budget, to reach 3 percent from 1.9 percent last year.