Nigeria cannot stop borrowing, according to the Central Bank of Nigeria (CBN), especially when it is necessary because it is a component of fiscal responsibility.
This statement was made by the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, on Wednesday during a national dialogue on Nigeria’s mounting debt problems titled “The Rising Public Debt in Nigeria and the Challenges of National Development.”
Borrowing is not illegal, but there should be monitoring and review of the money borrowed and the reason for which it is intended, according to Emefiele, who was represented by Dr. Tawose Joseph, Assistant Director, Monetary Policy Department, CBN.
“Fiscal responsibility includes managing debt. Debt is never wrong. For survival, private entities also borrow.
The amount of the debt and how it is used, though, are what are really important. If a lot of money is borrowed, it’s because there aren’t enough people making money.
“When you compare the income and spending, the government is accountable for what is used effectively. When the fear is above the threshold, though, where is it?
“CBN is aware that the weight of debt will be felt when an economy is in trouble. To ensure price stability in the economy, conventional and unconventional instruments are used.”