- Safiu Kehinde
The Federal Inland Revenue Service (FIRS) Chairman, Dr. Zaach Adedeji, has provided explanation on the motive behind Nigeria’s borrowing plans.
Speaking during a media parley at the State House Press Office on Tuesday, Adedeji harped on the need to for a nation to borrow, especially for capital projects, providing it is within the scope of the budget.
“What is the component of a country’s budget? You have your expenditure, you have revenue and you have loan in your budget. So, if my expenditure for this year is N100,000 and 80 will be from my revenue, and I will borrow 20. I have revenue of 90 and I’m borrowing 10, according to my budget. So what is the problem in that?
“Another thing people should understand is that borrowing is not a problem. Don’t forget that banks are parts of our economic ecosystem.
“When you say you go for lending, you go for sustainable. Have you ever heard Minister of Finance say that he is borrowing to pay for salary or to do anything?” He said.
Using the State House Press Office building as an example, the FIRS boss explained that borrowing for the construction of such capital project is essential in order to beat the cost such project will cost in the future.
I will give you a typical example. Look at the structure that we are in today. Imagine it was not built the year it was built. How do you think it will cost today? So you borrow in order to beat that cost in the future.
This, he maintained, also applied to road projects.
“Secondly, you borrow because of what we call matching concept in business, most especially when you have continuity.
“Anything that I will use that will go beyond my lifetime, why do I have to use my own time to do it? When you borrow to do road, and you collect taxes in the future for everybody that is using that road to pay their own fair share.
“When you see we borrow, it is part of economic plan. Any country has to borrow because it is part of the ecosystem of a viable nation.” Adedeji added.