Borrowing To Finance Budget | Independent Newspapers Limited
Newsletter subscribe

Business, Cover Choice, POLITICS

Borrowing To Finance Budget

Posted: May 17, 2015 at 12:16 am   /   by   /   comments (0)

The outgoing administration before now was tinkering with the idea of borrowing to finance the 2015 budget, a decision many Nigerians frowned at.

The incoming administration might have no other option if the report of a lean national purse is anything to go by. Much as it would earn his administration some derision, it’s a road Buhari may be forced to travel.

But according to Etuokwu, the idea is not totally bad and that any government that intends to do this, should spend the money borrowed on infrastructural development.

His words, “I have never been against borrowing; borrowing is good when it is used for productive activities. There are two schools of thought. Do you go on the path of expansion or do you go on the path of contraction.  What most government in default does is contraction. In the U.S, the government got out of recession through expansion. They began to inflate their economy. They were given money to families to inflate the economy. That was how US came out of its recession.

“If we have a government that says it was to tighten belt that cannot be the solution. What we need is a strategic combination of expansionist policies and a discipline approach to spending. I don’t have problem with borrowing to build infrastructure because infrastructure is a driver of the economy. Today, there is no country that owed more than the U.S. but U.S. today as 2 percent of World population but a quarter of  the World resources and yet they are the biggest borrowers.

“A government that goes borrowing for specific infrastructural and developmental activities will never lack.  If you borrow to develop infrastructure, the country will reap the gain in the nearest future but if you borrow and keep it in the pockets of some people, which is a calamity”.