The Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, says borrowing should not be seen as a weakness in Nigeria’s financial system, but as a normal part of government budgeting.
Speaking at a press session in Abuja, Adedeji explained that the Tinubu administration has already halted the controversial “Ways and Means” practice, where the Central Bank directly finances government expenditure. He said the outstanding balance from that arrangement has now been converted into a recognised federal government loan, which is being serviced.
“One of the key decisions of Mr President was to collateralise Ways and Means. We stopped printing money, and the whole loan was taken as a federal government loan. We are paying principal and interest, and that is why you now see stability in the system and less pressure on the exchange rate,” he noted.
He said critics questioning the rationale behind government loans should remember that all borrowing is done within the framework already approved by the National Assembly.
“When Mr President says revenue targets are being met, some people ask, ‘Why are we still borrowing?’ The right question should be: are we borrowing within the budget approved by the National Assembly? The answer is yes,” he added.
The FIRS boss insisted that meeting revenue targets does not mean borrowing should stop, pointing out that every country designs its budget with three major components: expenditure, revenue, and loans. According to him, borrowing is an essential part of the global economy and no government or individual survives purely on income without credit support. “Banks are part of our economy. When the government borrows from them, we pay interest. From that interest, banks pay salaries, workers pay taxes, and companies pay profits that are also taxed. It all feeds back into the system,” he explained.
Adedeji further argued that loans channelled into infrastructure projects such as roads are economically sustainable, since future tax collections from those who use the facilities will help repay the debt.
