Borrowing to pay salaries, proof of a serious financial crisis
From Uche Usim, Abuja
The Acting Accountant General of the Federation (AGF), Mr. Chukwuyere Anamekwe, has described the huge level of borrowing to bridge the budget gap and the payment of wages and salaries as worrying, saying it is a clear proof that the country was facing a huge financial crisis. .
He said concerted efforts must be made to reverse the trend through fiscal discipline, economic diversification, boosting exports and reducing revenue leakage, among others.
Anamekwe said this on Tuesday in Abuja at a retreat organized by the Office of the Accountant General of the Federation for members of the Technical Sub-Committee on Cash Management (TSCM) on the theme: To Stakeholders”
“We have to borrow to increase the payment of wages and salaries. It shows that we are going through a very difficult time. Government revenues are highly contested,” he said.
“The theme and focus of the retreat couldn’t have been better captioned, given the current tax challenges. Available records indicate that due to declining revenues, the Treasury had to resort to other sources in order to increase the payment of federal government officials! “There is an increase in public spending due to the increase in security concerns and social needs of citizens.”
The interim AGF noted that the myriad socio-economic challenges call for an articulated deployment of fiscal discipline and strategies that will help mitigate them.
“Now that these challenges are staring us in the face, you are all expected at this gathering to come up with ideas that will get us through.
“Therefore, we must all, at this retreat, endeavor to identify the challenges of revenue generation and other ways to improve the inflows into the coffers of the federal government; ensure the reduction of governance costs in the most acceptable manner and ensure synergy between and within stakeholders within the sub-committee,” he added.
Anamekwe also tasked the sub-committee with ensuring that it provides quality and cost-effective advice to the Federal Cash Management Committee.
He commended the Minister of Finance, Budget and National Planning, Ms. Zainab Ahmed, for her continued support in their endorsement, stressing that the gesture continued to help improve the capacities of members and stakeholders; thereby familiarizing them with Nigeria’s tax challenges and other issues related to cash management.
He urged participants to ensure that the event contributes to the advancement of the desired recovery strategies as it has become a real tool providing the necessary platform to share quality information and knowledge that helps hold the civil servants familiar with public financial management reforms; managing tax challenges, developing an effective and efficient cash management tool, among others.
In his remarks, OAGF Director of Funds, Mr. Sabo Mohammed, called for tighter fiscal discipline that requires governments to maintain fiscal positions consistent with macroeconomic stability and sustained economic growth.
“This justifies avoiding excessive borrowing and the accumulation of debt. It is expected that the discussions in this forum will contribute to improving the capacity of members/stakeholders and making them more familiar with Nigeria’s fiscal challenges and advance recovery strategies that will enable effective management and avoid deficits budgets.
“Budget deficits often indicate a variety of negative internal and external shocks that affect budgets directly as well as through their impact on the economic environment. Indebtedness, in recent years, is cause for concern,” he said. -he says.
In their goodwill messages, the representatives of the Debt Management Office and the Central Bank of Nigeria called for caution in the management of government finances.
They also insisted on economic diversification, by stimulating local production and exports to fatten foreign exchange reserves.