The chairman of the Federal Inland Revenue Service, Zacch Adedeji, has defended the federal government’s borrowing plan, insisting that loans remain a legitimate part of Nigeria’s budgetary framework even when revenue targets are met.
Speaking during the Meet the Press session organised by the Presidential Media Team in Abuja, Adedeji explained that President Bola Tinubu’s administration had already halted the controversial “Ways and Means” practice, with the outstanding loans now properly recognised as federal government debt.
“If you remember, one of the decisions of Mr President is to collateralise Ways and Means. We stopped printing, and the whole loan was taken as a federal government loan. We are paying principal and interest, which is why you have stability in the system and no pressure on the exchange rate,” he said.
The FIRS boss noted that borrowing should not be viewed as a failure of revenue generation, but as a normal component of a country’s fiscal plan.
“What are the components of a country’s budget? You have expenditure, revenue and loans in all budgets.
If my expenditure for the year is ₦100,000 and I plan that ₦80,000 is from revenue, and I will borrow ₦20,000, and I have done ₦80,000 in revenue and borrowed ₦20,000 according to my budget, what is the problem with that?” Adedeji asked.
He stressed that borrowing is part of the economic ecosystem globally, adding that no individual or government can survive solely on income without credit support.
“Borrowing is not a problem. Banks are part of our economy. No country or individual in the world survives based on its own income.
When the government borrows from banks, we pay interest. It is from that interest banks pay salaries, from salaries they pay taxes to state governments, and from profits I collect taxes,” he said.
According to him, borrowing for infrastructure projects such as roads is a sustainable economic strategy, since future tax collections from those using the facilities help repay the debt.
“So when Mr President says we have met our target or are doing well in revenue, they say, “ Why are we borrowing? Is borrowing not part of the budget we submitted to the National Assembly? Are we borrowing outside what is approved?” he asked.
