Nigeria’s government plans to accelerate its revenue strategy aimed at diversifying Africa’s biggest economy away from its reliance on crude oil sales now that it has emerged from recession, the finance minister said on Sunday.
The OPEC member’s economy grew in the second quarter, climbing out of its first recession in 25 years, as oil revenues rose.
But the pace of growth was slow, 0.55 percent year-on-year, suggesting the recovery remains fragile.
Finance Minister Kemi Adeosun said restructuring the debt portfolio into longer term maturities by borrowing more offshore, along with a record 7.44 trillion naira ($24.38 billion) 2017 budget, was aimed at boosting the economy.
“Why are we borrowing? Mobilising revenue aggressively was not advisable, nor indeed possible, in a recessed economy.
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But as Nigeria now reverts to growth, our revenue strategy will be accelerated,” she said in an emailed statement.
Last week President Muhammadu Buhari sought approval from Nigerian lawmakers for $5.5 billion of foreign borrowing.
It would include $2.5 billion for plugging part of this year’s budget deficit, and $3 billion for refinancing maturing domestic debt with dollar borrowing.
Adeosun, whose statement was based on comments she made in Washington following annual meetings with the International Monetary Fund and World Bank, said the government was “focusing more on external borrowing to avoid crowding out the private sector”.
Nigeria’s government increased spending on infrastructure in the 2017 budget to fund projects such as the $5.8 billion Mambilla hydropower dam and a second runway for the airport in the capital Abuja, as well as railway and road construction.
Such projects aim to diversify Nigeria’s oil-dependent economy, which fell into recession largely due to low oil prices and attacks on energy facilities in the southern Niger Delta which last year cut crude production by around a third.
