Adeosun, Udoma on collision course over how to source $2.3bn budget deficit
What looks like a fresh ministerial face off is about to ensue in the Presidency. This time around, it is between Nigeria’s minister of Finance, Mrs. Kemi Adeosun, and her counterpart, the Minister of Budget and Planning, Senator Udoma Udo Udoma
At the centre of the disagreement is whether or not Nigeria has the capacity to internally source the $2.3 billion deficit in the 2017 budget.
On her part, Mrs Adeosun concluded that Nigeria must not borrow more money to fund its budgets, and condemning the country’s continuous reliance on IMF and World Bank to raise money needed to upset the deficit.
Speaking at the Presidential Quarterly Business Forum held at the Presidential Villa in Abuja on Tuesday, the Minister said, “Given the reform in the Federal Inland Revenue Service (FIRS), the country can raise the needed fund within its shores.”
Adeosun’s call runs contrarty to the position by the Minister of Budget and National Planing, Udoma Udo Udoma who told journalists in Abuja that there would be no alternative to the planned foreign loans of $2 billion from the World Bank.
However, all the international lending institutions, including the IMF/World Bank and African Development Bank have insisted that Nigeria must carry out a number of far-reaching structural adjustment programmes to qualify for loan facility from any if them.
Officials of the Ministry of Budget and National Planning said, Senator Udoma had not been comfortable with Adeosun’s stance on how to source funds for the N7.3 trillion budget of 2017.
But Adeosun, who in the early part of 2016 equally disagreed with the CBN Governor, Godwin Emefiele on the apex bank’s refusal to reduce the interest rate and fight inflation, both of which remain the highest in most developing economies, said Nigeria should tap its resources.
According to her, Nigeria should no longer seek any budget-related loans, even as she denied that her office was supporting plans by the Debt Management Office (DMO), in collaboration with the Budget Office to raise about $1.5 billion from any willing international creditor agency.
Adeosun put it this way: “We cannot borrow anymore, we just have to generate funds domestically enough to fund our budget. Mobilize revenue to fund the necessary budget increase.”
She refused to address the recent claim by the budget office that the country’s estimated shortfall in internally generated revenue was $7.5 billion, which is feared would adversely affect the 2017 budget implementation.
However, the Budget department was alleged to have expressed hope that if Nigeria is able to get $3.5 billion from the lender institutions, the possibility of running the 2017 budget much easier than that of 2016 could be guaranteed.
Besides the proposed borrowing from the international bodies, Nigeria also targeted raising about $4 billion from the local debt market, through bonds and Treasury Bills sales for the budget.