Why Fed Govt Will Continue Borrowing – Lawan
The Senate President, Ahmad Lawan, has said that until revenue-generating agencies lived up to expectations, the federal government would continue borrowing to fund infrastructure.
Lawan gave the hint on Tuesday in an address delivered at the start of the plenary to welcome senators back from the Christmas and New Year break.
He said the need for more funds has become greater, to enable the government to continue with its infrastructure development drive.
He said that the Upper Chamber would not rest on its oars as it has resolved to interface with the revenue-generating agencies with a view to encouraging and assisting them to generate more funds into the coffers of the government.
Lawan said that “funding of the 2022 Budget is predicated on significant borrowing. Our country is caught between the devil and the deep blue sea.
“We have to construct and provide infrastructure in all parts of our country because infrastructure is needed for our nation to develop.
“However, we do not generate enough revenues to fund the provision of such infrastructure. Until more revenues are generated, the country has to borrow and also resort to other sources of funding our infrastructural development.”
He, however, said that “we cannot continue to borrow endlessly. It is imperative that we need to improve on the revenue to Gross Domestic Product (GDP) ratio. At about 8% revenue to GDP ratio, our country is basically at 50% of what is required of the revenue to GDP of 15% for it to support any significant economic development.
“The Senate will develop a strategy of engagement with revenue-generating agencies on how to make them achieve their targets and generate more revenues in 2022.
“The Senate will ensure that we boost their revenue-generating drive with a view to reducing borrowing for development of our much-needed infrastructure. This is a major challenge for our development and we need to treat it as such”.