15 June 2016, Abuja – To reflate the ailing economy, Federal Executive Council on Wednesday gave approval for external borrowing for the period of 3 years starting this year.
The Council also approved the review of debt management strategy for the same period. Minister of Finance, Mrs. Kemi Adeosun made the disclosure while briefing State House correspondents at the end of the FEC meeting at the presidential villa, Abuja.
Flanked by her counter-part, the Minister of State for Budget and National Planning, Mrs. Zainab Ahmed at the briefing, Adeosun justified the decision, saying it was necessary to stimulate the private sector and the financial institutions as well.
She said: “We would need to be borrowing. We need to borrow at the most cost effective rate and at the most cost effective and beneficial terms. And also the government recognizes that there is a need to stimulate the private sector, for the private sector to really grow banks must lend to the private sector so, we don’t want government borrowing crowding out the private sector.
“Government had taken a strategic decision that where possible, we would borrow more externally. That is the external debts in dollars or in any other currencies because the interest rates are cheaper, the tenures are longer and there is more room for banks to lend to the private sector especially SMEs. So the strategy was approved by FEC after much debate”.