Sunday, 18 September 2016

Nigeria Set To Inject $1.1 Billion To Boost Economy

The Minister of Finance, Mrs Kemi
Adeosun, told reporters in Abuja on Friday
that the additional funding, on top of the
initial 420 billion Naira released in May,

was primarily for capital expenditure
projects that would also involve support
from local banks and transaction partners.
“We are raising money. As you know the
Euro-bond capital raise is on.
“We are about to appoint advisers so we
we will be raising additional $1 billion.
“Two weeks ago we approved the external
borrowing plan and that was very
important,” the Minister said.
Plans To Borrow
According to her, the government plans to
borrow a total of 1.8 trillion Naira at home
and abroad to fund an expected budget
deficit of 2.2 trillion Naira.
In an attempt to reviving the crashed
economy, the government has approved
borrowing from the African Development
Bank, China, Japan and World Bank with
rates of 1.25 per cent and a 20-year
maturity.
“When we said we will borrow, we said we
will borrow the cheapest money first.
“We have approvals in that plan from the
World Bank, ADB, with interest rates as
low as 1.5 per cent and tenures as low as
forty years to intervene in some specific
areas which include agriculture, education,
health, rebuilding of the northeast and of
course the railway project that are very key
to what we are doing,” Mrs Adeosun
explained.
Bureaucracy in the civil service is an issue
that critics have asked the government to
address to hasting the release of funds
that would provide needed infrastructures
and add impetus to the economy
to cushion the effect of the recession on
Nigerians.
The Minister also pointed out that the
issue with fiscal initiatives was that “there
is always a lag”.
“There is always a time difference between
when you release money and when it has
an effect. We are trying to work on how we
can shorten that lag,” the Minister stated.
She highlighted that some of the delays
were in the procurement process, which,
according to her, were being looked into,
with the government doing its best to
speed up the process.
Another area that the government is
looking to push funds to, according to the
Minister, is the Social Intervention
Programme, which she said would receive
60 billion Naira. “That is very important in
terms of putting money into peoples
pocket,” she stressed.
She had on August 19 said that the
government would allocate 60 billion Naira
($180 million) more spending on capital
projects , as part of the 2016 budget.
She told reporters that the allocation was
an addition to earlier releases, aimed at
boosting the economy.
Mrs Adeosun said that before the
allocation of the 60 billion Naira the
government had spent over 400 billion
Naira on capital.
Economy In Recession
Nigeria’s economy had glided into
recession few weeks ago, after a report by
the National Bureau of Statistics showed
that the nation’s Gross Domestic Product
contracted by by 2.06% in the second
quarter of 2016.
According to the report, the decline has
caused the Naira to get weaker while lower
oil prices dragged the oil sector down.
The output shrunk by 0.36 in the first
quarter.
During the quarter, nominal GDP was
2.73% higher at 23.48 million Naira at
basic prices.
The oil-rich nation’s economy suffered a
set-back when the price of crude oil
dropped, dipping the nation’s revenue.
The situation was, however, compounded
by the resurgence of militants activities in
the south-south region where there
nation’s wealth is.
A group that calls itself the Niger Delta
Avengers have attacked different oil
installations in Niger Delta, forcing some
oil companies to declare force majeure.
Their activities have lowered the nation’s
crude oil output by 700,000 barrels per day
(bpd) to 1.56 million bpd in the last few
months.
Changes Would Come
After the report of the bureau was
published, the government had at different
occasions reassured Nigerians that the
economic recession would be short-lived .
Vice President Yemi Osinbajo is optimistic that
the economic recession will be short-lived
Vice President Yemi Osinbajo last week
expressed optimism that the economic
recession the country is battling with
would ease out soon.
He said changes would come ‘once the
Federal Government is able to resolve the
issues concerning the pipeline vandalism
and focus on sustainable diversification
policy’ .
The Vice President gave the assurance
while speaking to reporters at the
Redeemers University in Ede, Osun State.
The current administration of the All
Progressives Congress has also blamed
the administration of the Peoples
Democratic Party for the recession, saying
that the previous administration refused to
invest in infrastructure and save money for
the nation when the price of crude oil was
over $100 per barrel.
Promising to correct the maladministration
of the past government, President
Muhammadu Buhari decried what he
inherited from past administrations.
He said he would correct them with the
help of Nigerians.
President Muhammadu Buhari said his
administration is making effort to correct the
maladministration of the previous government
“I want Nigerians to realise what this
government inherited after 16 years of
PDP [Peoples Democratic party] and eight
consecutive government.
“There was no savings, no infrastructure
was done, no power, no rail, no road and
security. This is what the other party left
for Nigerians.
“Now they have seen what we have done
from Boko Haram to what we are trying to
do now with the militants.
“We have identified these problems, three
of them – security, economy and fighting
corruption.
“You have to secure our country to
efficiently manage it. You have to create
jobs for our youths and then we are
fighting corruption which is continuous,”
President Buhari said.