The federal executive council has given its approval for external borrowing,Vanguard reports.
Giving the approval yesterday,
FEC also gave its approval for the debt management strategy which is to last for the same period of 3 years of which the external borrowing will last.
Speaking to journalist after the FEC meeting at the Presidential Villa, the finance Minister Mrs Kemi Adeosun disclosed that the move was necessary as it will stimulate the private sector and financial institutions as well.
She said: “We would need to be borrowing. We need to borrow at the most cost effective rate and at the most cost effective and beneficial terms. And also the government recognizes that there is need to stimulate the private sector. ‘’For the private sector to really grow, banks must lend to it, so we don’t want government borrowing crowding out the private sector. Strategic decision “Government had taken a strategic decision that where possible, we would borrow more externally. That is the external debts in dollars or in any other currencies because the interest rates are cheaper, the tenures are longer and there is more room for banks to lend to the private sector, especially SMEs. So the strategy was approved by FEC after much debate. “While approving it, FEC suggested some guidelines which were that as we are moving more of our debt to dollars, we need to focus more on exports, especially non oil exports and discussions were held around how to make exporting easier. ‘’There was a lot of discussions around reforms that we would be needing in Customs and other ministries to make it easier to export Nigerian goods and agricultural produce and solid minerals for which there is demand at the moment. “Some of the bottle necks that exist in customs and those under quarantine need to be removed. If we do this, that would create foreign exchange earnings so that these borrowings which are in dollars when they need to be repaid, we would have dollar revenues to pay for them.”
Read more at: http://www.vanguardngr.com/2016/06/economy-fec-okays-external-borrowing-2/
0 comments:
Post a Comment