By Dipo Olowookere
Minister of Finance, Mrs Kemi Adeosun, has disclosed that not less than N330 billion is needed by the Federal Government every month to meet its recurrent obligations.
The Minister revealed that these obligations include salaries, debt servicing and statutory transfers.
She made this disclosure on Thursday in Abuja while speaking at the 14th Daily Trust Dialogue with the theme, ‘Beyond recession: Towards a Resilient Economy.’
However, Mrs Adeosun noted that the FG has been unable to generate enough revenue to meet these obligations.
She said this has left the government with no choice than to borrow to finance critical projects.
Mrs Adeosun revealed that with a huge monthly personnel expenditure of N210 billion and debt service burden of N120 billion, it was difficult to generate enough revenue to meet the obligations and fund capital projects.
“My requirement every month – salaries, statutory transfers – every month, I need N210 billion.
“Debt, not the debt that we are planning to take but inherited debt, I need N120 billion just to service it. So every month I need N330 billion.
“Now for FAAC (Federation Accounts Allocation Committee), shared between Federal, States and Local Government, I require without capital budget, just recurrent is N700 billion.
“Just to give you an idea of where we are today, last month FAAC was N310 billion. So FG got about N140 billion, but I must cover N330 billion a month before we can do a single capital project.
“So, when we start the argument, should we borrow, should we not, the truth is that we have no choice.
“If you are waiting for the oil price to recover, the prognosis is that it’s not going to go back to 110 dollars per barrel any time soon.
“So, to get the economy growing, we have no choice but to look for low cost funds and put that infrastructure in place because it is the infrastructure that will unlock the economy,” Mrs Adeosun disclosed.
Modupe Gbadeyanka