Nigeria’s continued reliance on borrowing to fund its national budget has been defended by the Budget Office of the Federation, which insists that the strategy reflects global fiscal practice rather than economic fragility.

The clarification comes amid public concern following the removal of fuel subsidy, with expectations that the policy would significantly reduce government borrowing and ease fiscal pressure.

Speaking in Kano, Director of Expenditure (Social) at the Budget Office, Yusuf Muhammed Kurawa, explained that borrowing remains a legitimate tool for bridging budget deficits, noting that many economies depend on it to sustain development.

According to him, the critical issue is not borrowing itself but how effectively such loans are managed and deployed to support national priorities and economic growth.

Kurawa acknowledged that Nigeria is currently grappling with fiscal constraints, which continue to impact budget implementation despite ongoing reforms by the administration of Bola Ahmed Tinubu.

He, however, expressed optimism that recent economic policies introduced by the government are beginning to yield results, urging Nigerians to remain patient as the reforms take full effect.

The Budget Office official described the national budget as the most important policy document after the constitution, stressing that it plays a central role in shaping economic direction and public spending.

He maintained that the government remains committed to ensuring discipline, transparency, and efficiency in budget execution, adding that all processes within the Budget Office are being handled with precision and accountability.

The remarks come at a time when Nigeria faces mounting economic challenges, including revenue shortfalls, inflationary pressures, and increasing debt obligations, all of which have intensified scrutiny of government borrowing.

Analysts note that while borrowing is a common global practice, its sustainability depends on strong fiscal management, improved revenue generation, and the ability of the economy to absorb and repay debt without compromising growth.

They argue that without significant expansion in revenue sources, reliance on borrowing could continue to strain public finances and limit the government’s capacity to invest in critical sectors.

Nonetheless, officials insist that ongoing reforms are designed to stabilise the economy, improve fiscal balance, and gradually reduce dependence on borrowing over time.

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Speaking at the IMF and World Bank Annual Meetings in Washington, DC, Abebe Selassie, the IMF’s African Region Director, emphasized the autonomy of Nigeria’s decision, stating, “We don’t have programs in Nigeria. Our role is limited to regular dialogue, as we have with countries like Japan or the UK.”

Selassie acknowledged that while subsidy removal aligns with Nigeria’s economic goals, it also places social strain on citizens. He recommended that the Nigerian government expand social protections to support vulnerable populations affected by the policy shift.

Since President Tinubu’s announcement of the subsidy removal on May 29, 2023, fuel prices have more than tripled, sparking public outcry. Many Nigerians had speculated that the IMF influenced the policy; however, Selassie’s statement dismisses this notion, emphasizing Nigeria’s sole authority over the decision.

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