- Finance minister says no confusion in handling of economy
The federal government has approved a three-year rolling external borrowing plan.
Briefing State House Correspondents
after the Federal Executive Council (FEC) meeting held in Abuja
yesterday, the Minister for Finance, Mrs. Kemi Adeosun, said the
approval would be transmitted to the National Assembly immediately.
She said the loans would come from
agencies such as the World Bank, African Development Bank, China Exim
Bank, and other development agencies like the Japanese International
Cooperation Agency (JICA).
Also at the briefing were the Minister
for Information and Culture, Lai Muhammed, Minister for Solid Minerals,
Kayode Fayemi, Minister for Finance, Minister for Agriculture, Audu
Ogbeh, and Minister for Education, Adamu Adamu, who also briefed
journalists with respect to FEC’s approval for their respective
ministry.
Other highlights of the meeting included
the changing of the name of Ministry for Solid Minerals to Ministry of
Mines and Steel Development, the approval of a new roadmap for the
development of the solid minerals sector, approval of contracts to build
a new structure called international house at the University of Ibadan
and a library at the University of Lagos.
The finance minister said the plan to
borrow externally was in line with government’s strategy to focus on
concessional debts, low cost loans particularly from multi-lateral
agencies.
She said: “So this plan we have put
forward today which was approved by the FEC and will be transmitted to
the National Assembly for the approval includes:
“Concessional loans average interest
rates 1.25 per cent, four to seven year moratorium, 20 years to pay.
From agencies such as the World Bank, African Development Bank, China
Exim Bank, and other development agencies lke Japanese International
Cooperation Agency (JICA).”
Adeosun said the loans would be applied to develop strategic sectors which government believed would help revive the economy.
She said the power sector would receive a
significant amount of the loan to take care of projects militating
against efficient power generation. She specifically cited transmission.
“This is long term money that will enable us solve some of the problems in that sector,” she added.
Adeosun said the health sector would also benefit from the loan.
Adeosun said the health sector would also benefit from the loan.
She said: “There are projects around
polio. There are some money that have been allocated to us to help us do
some massive immunisation, in order to control this recent outbreak.
This is being provided by the World Bank.
“There is provision for solid minerals and of course I’m very excited about the discovery of nickel. The World Bank is supporting the project by the Ministry of Mines and Steel with $150 million to enable them strengthen their capacity in that area.
“There is provision for solid minerals and of course I’m very excited about the discovery of nickel. The World Bank is supporting the project by the Ministry of Mines and Steel with $150 million to enable them strengthen their capacity in that area.
“The largest beneficiary of our
borrowing is agriculture because it is equally strategic and we have
programmes by the minister some of which he inherited and is going to
restructure and reform and some are new to the ministry.”
The minister said government would also seek funding through Eurobond.
The minister said government would also seek funding through Eurobond.
She said: “The FEC sent a strong signal
to everybody that we need to reach out to the National Assembly to get
this borrowing plan approved as soon as possible. Because a lot of this
money is for developmental projects. We need this money and it is
available for us.
“Remember these are foreign exchange coming to our country that will help our economy.”
Answering questions after the briefing, the finance minister said the present administration was on course to lay a solid foundation for Nigeria’s development.
Answering questions after the briefing, the finance minister said the present administration was on course to lay a solid foundation for Nigeria’s development.
Adeosun dismissed claims that the administration was confused about how to manage the nation’s economy.
According to her, the government has a clear view of what to do to turn the economy around.
According to her, the government has a clear view of what to do to turn the economy around.
She said: “It is the worst possible time
for us. Are we confused? Absolutely not. How are we going to get
ourselves out of this recession. One, we must make sure that we
diversify our economy. There are too many of us to keep on relying on
oil. We can all see what happened at the output data of the oil and gas
sector. What’s happening in the Niger Delta has dragged down the GDP of
the entire economy. We’re too dependent on oil.
We have to invest in capital projects.
We have to invest in capital projects.
“No we are not confused, the time are
confusing but we are not confused. We are extremely focused. We know
that if we can just bear and get through this difficult period, Nigeria
is going to be better for it. If we rely on oil and the price of oil
remains low and the quantity of oil remains low, we can’t grow. We have
to grow our non oil economy.
“I think that we have a long way to go. We’re not confused and we’re not deceiving ourselves that everything is rosy. It’s not. It’s a difficult time for Nigeria but I think Nigeria is in the right hands and if we can stick to our strategy. We still have some adjustments to make. I think we need to make some adjustments in monetary policy. It’s quite clear we do and we will do that. We’re working on that. We need to try and find a way to support the manufacturing sector better and we will do that.”
“I think that we have a long way to go. We’re not confused and we’re not deceiving ourselves that everything is rosy. It’s not. It’s a difficult time for Nigeria but I think Nigeria is in the right hands and if we can stick to our strategy. We still have some adjustments to make. I think we need to make some adjustments in monetary policy. It’s quite clear we do and we will do that. We’re working on that. We need to try and find a way to support the manufacturing sector better and we will do that.”
While answering question on the figure
released by National Bureau of Statistics, Adeosun said the inflation
was being pushed by cost and it would be curtailed.
“What we have is cost-push inflation and
when you have cost-push inflation it is structural inflation. It is not
going to respond to monetary policy tools such as increasing the rate
of interest. We have to address the structural causes of the inflation
“The trend, the rate of inflation growth has slowed down and that’s a good sign.”
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