Finance Minister Mrs. Kemi Adeosun has unveiled the Federal Government’s plans to inject N350 billion into the economy quarterly to stimulate growth.
Speaking on Sunrise, a Channels TV programme, she said the fund will be released as soon as the budget is signed.
Said Mrs Adeosun: “As soon as the budget is signed, we are going to pump N350 billion into the economy in this quarter and we are going to do so every quarter until we stimulate growth. And we would see growth if we spend money on those things that would create jobs.”
To Mrs Adeosun, “there are no quick solutions to fixing the economy.
“If you have cancer, you cannot take panadol; you have to take proper medication. I don’t want to come here and give people false hope. I don’t want to use the word magic because ministers get into trouble when they use the word “magic”. It has to be done painstakingly,” she said.
The minister said the drop in crude oil prices presented a good opportunity to reposition the economy, adding that the opportunity for diversification of the economy created by the crisis should not be wasted.
“Everybody is now extremely sober. Every Nigerian is sober. All the governors have realised that oil price can plummet from $110 per barrel to $28 per barrel over such a short period of time and we could be so exposed that we cannot even pay salaries.
“So, there is a sobriety that has come in and I don’t think we should waste it. We are working very hard with the states and we said to them, first of all we are not bailing them out; we have said we would have a fiscal structuring plan. Whatever we are doing is conditional; they must go and drive efficiency.”
On the Sovereign Wealth Fund (SWF), Mrs Adeosun said the Federal Government wanted to “reposition it and have it focused in line with the government’s objective, which is investments in infrastructure”.
The government realised that even with 30 per cent of the budget, the country’s infrastructure gap is so wide that government alone cannot bridge it, she said.
“So, what we are hoping is that the Sovereign Wealth Fund now becomes a channel to attract further private money, particularly from investment funds from abroad. So, we really want to focus on infrastructure – toll roads, bridges, power plants, things that would help the economy grow.”
She went on: “Let me explain the structure of states and Federal Government. Fifty-two per cent of the money actually comes to the Federal Government. So, even if the Federal Government say they want to spend theirs, the Federal Government too didn’t save its portion. Federal government was not saving. In fact, Federal Government was borrowing, even to pay salaries. And that is where the disconnect comes in.
“So, I think it is largely unfair for the Federal Government to say ‘states were the ones that made me to spend’. I can spend mine, but I can’t force you to spend yours. The Federal Government didn’t save its share. So, collectively, I don’t think we should be trading blames. I think what we should be doing now is to look at the lessons we have learnt. The federal, states and local governments must have savings. Even if we don’t have savings, we can have investments. Look at Saudi Arabia; it has about $700 billion of reserves unspent, and we have about $28 billion. Oil goes, oil comes, but they still have something to show for it.”
She said the government was focused on revamping domestic production as part of efforts to diversify the economy.
“If we just feed ourselves rather than importing food, we would create jobs and wealth. We have a huge population, a huge land mass and what is missing, perhaps, is, unfortunately, infrastructure”.
The minister also disagreed with a recent comment by a former minister, Oby Ezekwesili, that President Muhammadu Buhari has introduced “archaic and opaque” economic policies which are hurting the poor.
Adeosun said: “I don’t agree that we have a command and control economy. What we are trying to have is a planned economy. There must be some planning. When we were growing, they used to say Nigeria has the highest number of private jets and we would all clap for that.
“But we also have the most terrible unemployment rate. So, what we are trying to do is to plan for the future and have an economy that meets the needs of Nigerians. We are a huge economy, so we shouldn’t have an economy where growth is not inclusive and allows few people to prosper at the expense of others. So, I don’t think we have a command and control economy.”