Business

Why Nigeria Can’t Stop Borrowing ― CBN

Published

4 years ago

Apr 10, 2021.

The Central Bank of Nigeria (CBN) says Nigeria cannot stop borrowing, especially when it is necessary as it is part of fiscal responsibility.
The CBN said there is no crime in borrowing, but that there should be monitoring and evaluation of the money borrowed and the purpose meant for.

The Central Bank of Nigeria (CBN) says Nigeria cannot stop borrowing, especially when it is necessary as it is part of fiscal responsibility.

The CBN Governor, Godwin Emefiele, made the comment at the National Dialogue on Nigeria’s rising debt profile, titled: ‘The Rising Public Debt in Nigeria and the Challenges of National Development’ organised by the ActionAid Nigeria (AAN) in Abuja on Friday.

This is just as AAN and stakeholders expressed worry over unstable levels of borrowings and rising national debt profile under the President Muhammadu Buhari-led administration and rising poverty level.

Emefiele, who was represented by the Assistant Director, Monetary Policy Department, CBN, Dr Tawose Joseph, said there is no crime in borrowing, but that there should be monitoring and evaluation of the money borrowed and the purpose meant for.

He said, “Debt is part of fiscal responsibility. Debt is never a crime or a sin. Private entity also burrows to survive. But what matter most is the quantum of the debt and the usage of the debt as well. If money is borrowed as a result of shortage of income generation.

“When you compare the income and expenditure and is efficiently used is part of government responsibility. But where the fear is when it is above the threshold.

Naira

“CBN understand that when there is crisis in an economy, then the burden of debt would be something. That is why the conventional and non-conventional instruments is there to ensure price stability in the economy.”

Emefiele added that the CBN formulates policies that positively affect the grassroots people, and added that the Apex Bank considers facts and figures before making policies.

He said that the CBN has rolled out 37 initiatives to positively affect the economy, but noted that there are challenges despite that intervention.