Minister of Finance, Mrs Kemi Adeosun, on Friday said the planned N1.8 trillion capital investment in 2016 by the federal government was key to driving economic growth.
Adeosun told participants at the KPMG in Nigeria’s CFO Forum and Survey Launch in Lagos that to reflate the economy and avoid recession, a spending stimulus was needed.
In her keynote address to the participating chief financial officers, the minister said that the Nigeria’s GDP in 2015 was the lowest in the last 15 years and pointed out that even whilst oil prices were high, GDP had been falling, “To reflate the economy and avoid recession, a spending stimulus was needed.”
A statement issued by the Special Adviser to the Finance Minister on Media Matters, Mr Festus Akanbi, the Minister recalled that a similar stimulus had actually been provided in the global downturn in 2008, pointing out however, that the stimulus now needed would be strategically targeted at investments that would support a diversified economic growth.
She said the proposed 2016 budget would finance investments in key infrastructure particularly in transport, power, health, housing and education adding, “These investments would create jobs with the various contractors that would execute the projects.”
She explained that that public investment would attract further investment from the private sector and those investments in power and transport would increase the competitive position of Nigerian businesses.
The Minister said, “No economy has ever grown by under-investing in infrastructure,” stressing that the ongoing ”fiscal housekeeping”, which included sanitising the payroll, which to date, has unveiled over 23,000 possible ghost workers and the creation of the Efficiency Unit was a key strategy in managing recurrent expenditure.
Further, she said the focus on improving non-oil revenue collections was an important strategic objective and was essential in ensuring that the planned borrowings were channelled to capital projects rather than being spent on recurrent items.
On the subject of the planned borrowing, the Minister explained that Government was seeking the lowest cost funds and was therefore consulting with the multilateral agencies, which offered concessional rates of interest as low as 1.5 per cent before looking at the commercial Eurobond Market.
She said that the financing strategy was to restructure much of the existing debts, which has short maturity and align it with the investment plans of the government in line with its Medium Term Expenditure Framework. She assured that government was ensuring that projects to be undertaken would create direct and indirect revenues, which would be used to repay the obligations.

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