The Minister of Finance, Dr Ngozi Okonjo-Iweala, has warned governors against excessive borrowing to ensure the economic growth of the country, explaining that the increasing domestic debt was as dangerous as the external one.
The minister gave the warning in Enugu on Friday while delivering a lecture entitled `Managing Public Finance for Agricultural and Industrial Growth’ at the 2012 South East Economic Summit. She said that strategies were being put in place to reduce the country’s debt.
``I want to give advice to our governors here,” she said. “Those who are taking domestic debt need to watch it because it is as dangerous as or even more so than the external debt.
``When you have domestic debt, you must service it because it is your institutions, your pension funds, your banks who owe this debt and you must have to pay it otherwise it leads to other consequences within the economy.
``I am happy to say that we have put in place a very good strategy to manage the national domestic debt which is to decelerate the rate at which we borrow,’’ she said.
On agriculture in the South East, the minister said the zone had a comparative advantage for the production of some food crops but was being hampered by limited land and tremendous gully erosion.
Okonjo-Iweala said the World Bank had provided a credit of 450 million dollars for the South East to decisively deal with gully erosion to promote agriculture.
The minister stressed the need for an increase in the financial mortgage system to create opportunity for youths to own houses.
On his part, the former Governor of the Central Bank of Nigeria, Prof. Chukwuma Soludo, explained that the zone would not progress without developing a sound vision.
According to Soludo, developing the vision would help to drive the economy of the zone to greater heights.
He, however, called on the governors of the South East to create an enabling environment for investors to thrive in the zone.