The Federal Government has said that the need to jump start the economy from the near-comatose state informed its decision to tackle the nation’s infrastructure deficit with planned increase in expenditure by 30 per cent in 2016.
Besides, government has assured that the N1.8 trillion projected capital expenditure would be strictly invested in transport, roads, housing, power and health sectors.
The Minister of Finance, Mrs. Kemi Adeosun, while addressing Chief Financial Officers (CFOs) at the KPMG’s 2016 CFOs forum, held in Lagos at the weekend, maintained that the Federal Government was poised to increase capital spending to address infrastructure deficit, stimulate the economy and achieve a real GDP growth rate of 4.2 per cent in 2017.
According to her, the outlook of the Nigerian economy was hinged on four key pillars: stimulating the economy to achieve a real GDP growth rate of 4.2% in 2017, reducing the cost of governance, extracting efficiencies in the public service.
She submitted that if the government spends strategically, it would stimulate economic growth, boost industrialisation, increase competitiveness in business, accelerate GDP growth and create wealth for the nation.
Concerning the projected budget deficit of N2.2trillion in 2016 (2.16 per cent of GDP), Adeosun said: “N1.8 trillion borrowing would be structured to achieve cost effectiveness and acceptable debt sustainability ratios. $4.5 – 5bn to be raised from multiple external sources including multilateral agencies and export credit agencies, tap of eurobond market, balance to be raised in domestic market.”
The minister also noted that there was need to reduce government borrowing in the domestic market.
“Government is borrowing too much in the domestic market and we want to repay the bonds and go out so that the money come looking for you.”
She added that direct revenues from revenue generating projects financed would also be deployed for debt service.
The minister also disclosed that the fund is currently put at N6 trillion, noting that the fund has been invested in bonds, treasury bills and other asset classes.
“The pension fund has been invested and it is earning returns. The money is actually doing something. We need to come to the market to compete more.
“There is a correlation between corruption and inefficiency and the growth of this economy. No oil economy will be at this stage. It is because we fail to attack corruption and inefficiency was growing.
“We need to spend in line with where we are going as a nation to stimulate growth. We need a little but different thinking to get out from where we are,” she said.
We are trying to achieve substantial increase in gross capital formation, enabling industrialisation and increasing competitiveness of business.
“As we are moving the government in the direction of sustainable growth, Nigeria, in the next three to four years will be a totally different economy. Lets get going again to build a more resilient economy,” she added.