The chairman of the Federal Inland Revenue Service (FIRS), 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 were 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 is taken as Federal Government loan. We are paying principal and interest, and that 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 is the component of a budget of a country? You have expenditure, revenue and loan in all budgets.
“f my expenditure for the year is ₦100,000 and my plan is 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 was part of the economic ecosystem globally, adding that no individual or government survives solely on income without credit support.
“Borrowing is not a problem. Banks are part of our economy. There is no country or individual in the world that survives based on its own income.
“When 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 who use the facilities help to repay the debt.
“So when Mr President said we have met our target or we are doing well in revenue, and 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?” the FIRS boss queried.
