By InvestAdvocate

(INVESTADVOCATE)- Ngozi Okonjo-Iweala, Minister of Finance Federal Republic of Nigeria has said that Nigeria is not broke and may run into debt if the Federal Government does not deregulate the economy.

Okonjo Iwuala On Monday said this on Channels Television live programme in Abuja Nigeria while reacting to a question on the financial state of Nigeria and the ongoing removal of the fuel subsidy by the Federal Government.

“Nigeria is not broke, but cannot continue to service our debts, if we continue like this, in the next five years, we will be broke and be like Greece” she said.

She affirmed that it was becoming so difficult servicing Nigeria’s External Debts, “our business people are not able to get their letters of credit honoured or do any business abroad, investments were not coming in” she said.

According to her, following Government’s deregulation initiative, there was a turnaround at the situation whereby people began coming to Nigeria to invest. “Our telecoms sector boomed and so many other sectors that were deregulated took off” she said.

Iweala further affirmed that if Nigeria piles up domestic debt and cannot pay, it will become worse.

The Nigeria’s Minister of Finance said that for instance, if a Bank buys a Domestic Bond floated by Government and do not get paid as at when due, subsequently, they may not be able to function and the economy will gradually come to a halt” Iweala affirmed.

She said that Nigerians do not realise how sensitive it is to accumulate Domestic Debt. “We have to slow it down and that is what we have done in the 2012 budget” the Minister said.

Iweala also said that instead of borrowing N1.1 trillion, Nigeria will borrow much less and about N794 billion will be cut down on a yearly basis.

Prior to this time, Abraham Nwankwo, Director General (DG) of Nigeria’s Debt Management Office (DMO) put Nigeria’s total debt (external and domestic debt) as at the end of September this year at $40 billion.

A breakdown of this figure showed that the country’s total external debt stood at $5.6 billion, while domestic debt was N5.3 trillion ($34.4 billion).

President Goodluck Jonathan’s has been quoted as saying that if subsidy is not removed, Nigeria will be broke within the next one and half year contrary to the five years that Iweala Nigeria’s Minister of Finance told Nigerians on Channels television today in Abuja Nigeria.

“If subsidy is not removed, Nigeria will be broke within the next one and half year, fuel subsidy must go and that Nigeria cannot continue to borrow to fund it” President Jonathan was quoted as saying.