The Minister of Finance, Kemi Adeosun, has reassured Nigerians that a cocktail of economic programmes being pursued by the current administration will definitely return the country to growth.
Speaking on the topic ‘Changing the Growth Narrative: Growth will Return’, at the Ecobank Nigeria’s Customer Forum in Lagos at the weekend, the Minister said such programmes will achieve, among others, increased efficiency in government expenditure and increase in government revenue.
The Minister pointed out that the impact of the decline in the nation’s oil production was significantly affecting the government’s cash flow position in spite of the modest successes recorded in the area of revenue collection and the relative increase in the price of crude oil in recent times.
She revealed that the well documented federal government successes in increasing efficiency and plugging leakages will continue, the Minister stated that the savings realised from these would grow as the administration continues to explore all areas to improve efficiency.
According to her, for a nation, where salaries and statutory transfers and debt service gulp N330 Billion monthly, the Federation Account Allocation Committee requires the sum of N700 Billion monthly for distribution. She, however, noted that the last time such threshold was met was in July 2014.
The Minister restated the resolve of the present administration to invest in infrastructure to include railways, power and roads which according to her, will provide the Nigerian entrepreneurs with the necessary infrastructure to get their goods to market.
She added that private capital would be mobilised to complement government spending on infrastructure to achieve growth, explaining that infrastructure expenditure will come from a combination of Private Sector and Government expenditure (Savings and Borrowing).
“We can’t sell coal, steel and solid minerals by transporting them by road. We lose significant income due to the poor infrastructure currently available in Nigeria,” she stated.
“The $29.5bn borrowing would facilitate the East-West coastal and the Lagos–Kano fast train railway projects as well as the Mambila 5000MW power project.
“These are 5-7year critical projects that will generate their own revenues to repay the investment and by seeking concessionary loans around 1.5% interest rates, provides a significant window of opportunity for Nigeria.
“Government would continue centralised collections of revenues and eliminate leakages through the Treasury Single Account and drive increased recoveries from the MDAs by instituting an efficiency unit.”
The Minister stated that this administration would manage debt sustainably by restructuring the inherited debt portfolio as reflected in the fiscal roadmap; this, she said, starts with restating debt figures to recognise unrecorded Government liabilities (2.2% of GDP).
She also explained that borrowing would be structured to achieve cost effectiveness and acceptable debt sustainability ratios. Government also plans to use earnings from revenue-generating projects that are debt financed to service debt, while short-term obligations are to be refinanced into longer-tenure instruments.
“The Federal Government would implement specific policy initiatives to catalyse Micro, Small and Medium Enterprises (MSME) growth (c.50% of GDP),” she said.
“Some of these initiatives include tax harmonisation and incentives, Inclusivity through increase in share of business awarded to MSMEs from government and micro loans for women and the Development Bank of Nigeria recent kick off with the US$1.3bn facility.”