The Abuja Chamber of Commerce and Industry has called on the Federal Government to avoid raising money from the domestic financial market to fund the fiscal deficit of N2.35 trillion contained in the 2017 budget.
The President, ACCI, Mr. Tony Ejinkeonye, who stated this in Abuja, said that borrowing such a huge amount from the domestic financial market would crowd out the private sector from accessing funds for investment purposes. He said rather than borrowing from the domestic market, the government should approach foreign financial institutions to source the deficit.
According to him, since the interest rates on foreign loans are lower than what is obtainable in the domestic market, such loans will make more impact for developmental projects than locally-sourced funds. Ejinkeonye stated, “The estimated aggregate revenue for 2017 is N4.94 trillion, which implies a deficit of N2.35 trillion. We know that external sources of deficit financing, non-banking public source of deficit financing and exchange rate have significant and positive implications on economic stability