The federal government has indicated that 2016 will be a tough and difficult year for the country. Minister of Finance, Kemi Adeosun, gave the indication at the opening of the 7th Annual Bankers Committee retreat yesterday in Lagos, noting that Nigeria was faced with some fairly significant micro-economic challenges that required some fiscal house-keeping.
“It is going to be tough and we are going to have to make extremely tough decision. We have got the resilience and space to do that,” she said.
Adeosun noted that the country fortunately has some head-room, as the debt to GDP ratio is at 12 percent and that gives some space to run a deficit budget with the specific objective of stimulating the economy.
“To do so, we need to do some fiscal housekeeping. We have to control the significant challenge we have around recurrent. If you look at recurrent at a percentage of our total budget with the just approved supplementary budget, it is about 90 percent. If we continue in that trajectory, every penny we borrow will go into recurrent,” she said.
The minister, who was enthusiastic that Nigeria can overcome the challenges however, warned that she was not attempting to white- wash everything or paint a rosy picture.