Adeosun stated this in an article entitled, ‘The debt debate: Deconstructing the debt story’, in which she explained the debt history, the short-term strategy and the medium to long-term outlook for the economy.
She said anyone who thought that the economy the administration inherited in 2015 was in need of minor adjustment was deluded.
The minister stated, “Oil prices had plunged from a height of over $120 to a low of $28 per barrel, yet the country had foreign exchange reserves of $28.34bn (having declined by $16bn in the two years to June 2015 from a high of $44.95bn).
“Despite just 10 per cent of the budget allocated to capital expenditure, debt had (in a period of unprecedented oil earnings), inexplicably risen from N7.9tn in June 2013 to N12.1tn in June 2015. Depending on the candour of the commentator, the outlook was at best challenging, and at worst, bleak.”
She said to deliver a fundamental structural change to the economy that would reduce the country’s exposure to crude oil, an expansionary fiscal policy was adopted with an enlarged budget, which would be funded in the short-term by borrowing.
As the economy recovers and returns to growth, borrowings will be systematically replaced by revenue, according to the minister.
“Through the implementation of the Efficiency Unit and enrolment of Ministries, Departments and Agencies on the Integrated Payroll and Personnel Information System, we have successfully saved N206bn in payroll costs using technology to drive the cleansing process, with the removal of 54,000 fraudulent or erroneous entries. This was attained without the negative social impact of retrenchment.” Adeosun said.