Nigeria is to introduce a new debt management strategy that will help restructure the maximisation of benefits derivable from any loan accessed by the county.
Minister of Finance, Mrs Kemi Adeosun revealed this while briefing newsmen at the end of Wednesday’s Federal Executive Council meeting in Abuja.
She said the new plan, which would run from 2016-2019 would help address the current economic challenges.
The Minister said the decision was taken in line with the current administration’s policy of revitalizing the economy, in the wake of current challenges.
She said following the expiration of the last debt management plan, a new one had to be adopted.
“There was the need for a new one for two reasons; one, the previous one had expired and two, given current economic challenges and then the economic focus of this government to diversify the economy, the Council felt there was the need for a new strategy,” the Minister explained.
Mrs Adeosun said due to current economic realities, the country was left with no option than to borrow externally, where the interest rates are cheaper.
“Government recognises that for the next three years, to really stimulate this economy and to provide the infrastructure that we need, we will need to be borrowing. So we need to borrow at the most cost effective rate and under the most effective and beneficial terms. Government has taken a strategic decision that where possible, we will borrow more externally in dollars or in other currencies because the interest rates are cheaper and the tenures are longer,” she said.
The Minister said the Council recognised the high demand for Nigerian goods abroad and so non-oil exports would also be given priority, in order to improve the economy.
“As we are moving more of our debts to dollar, we need to focus more on export especially non-oil exports, where it was recognized that there is real demand for Nigerian goods and there was a lot of discussion around the reform that will be needed in Customs and other agencies, to make it easier to export Nigerian goods and agricultural produce as well as solid minerals,” Mrs Adeosun explained.
The Minister of State Budget and National Planning, Mrs Zainab Ahmed also spoke to State House Correspondents on decisions reached at the meeting, where she further highlighted the importance of the debt management strategy.
“The importance of adopting this strategy is that we now have a debt strategy that aligns with the medium term expenditure framework and the financial system here will have more resources to lend to the real and productive sectors,” she said.
Just like last week, the Federal executive Council meeting was again presided over by the country’s Acting President, Professor Yemi Osinbajo, in place of President Muhammadu Buhari.