The minister of Finance, Kemi Adeosun, has set out the government’s plan to reset Nigeria’s economy with structured borrowing, targeted investment and diversified growth.
Speaking to some of the country’s most influential captains of industry, in Lagos at the Lagos Business School breakfast meeting, the inister told the audience: “We have inherited a set of conditions that requires us to refine how we collectively work towards ushering in a new era in Nigeria.”
Pointing to the impact of falling global oil prices on the economy, Adeosun said: “In the past, we had the means but not the will. Now we have the will but we no longer have the money to invest. The safety blanket of oil has been ripped away, laying the poverty of Nigeria’s institutions bare.
“We have spent too many years tinkering at the edges of our institutions, our infrastructure and our economy and that the mistakes and misjudgements of the last 40 years have set our clocks back by decades.”
A blueprint for growth Setting out government’s ambitious blueprint for growth, Adeosun said: “We must collectively adopt a blueprint that equips the future generations to be creative and dynamic, that allows us to articulate a vision of a Nigeria, with a strong educational foundation; rich in depth of knowledge with a breadth of skills, an expansive infrastructure capable of servicing the needs of a nation of 150 million Nigerians.”
In an hour long presentation, the minister detailed what she described as an “expansionary budget for investment and growth.” She told the distinguished audience: “We must find the money, and create a system that enables targeted expenditure, based on the nation’s priorities.
This expenditure will be efficient and impactful, focused on creating wealth for the majority.” Outlining N1.8 trillion in borrowing to invest in the priorities of transport, roads, housing, power and health, the minister said: “We are committed to a countercyclical budget expenditure model. This has been a success in other nations, offsetting the risk of recession and creating an economy which is not based on either fragile consumer spending or over-reliance on oil.”
The minister used her presentation to set out the four pillars of the economic plan: Stimulate economic growth to achieve a real GDP growth of 4.2% in 2017; Reduce the cost of governance and strengthen institutions to combat corruption extract efficiencies in public service; increase government expenditure on infrastructure and fund the budget deficit and negative trade balance cost effectively.
She said the targeted outcomes included: Substantial increase in gross capital formation; acceleration of GDP growth; infrastructure development to unlock economic growth; diversification of the economy and growth of the non-oil sector; improvement in the overall business environment; improvement in key socio-economic indicators and jobs and wealth creation.
However, the minister warned those thinking the borrowing would open the door to renewed fiscal indiscipline that she planned to continue her “aggressive programme of fiscal housekeeping.” She said: “We must safeguard this borrowing, ensuring that the wastages within the existing systems are firmly addressed. We cannot mortgage our future based on a system that has failed us for generations. We must be careful in our borrowing and prudent in utilization.”
A nation of entrepreneurs The minister spoke directly to the hard working men and women who run Nigeria’s vital small and medium sized companies, saying: “We are a nation of entrepreneurs, and our entrepreneurs need reliable infrastructure, skilled employees and transparent systems and regulation that support them as they grow.
We are introducing sound policies and robust systems that will benefit the micro, small and medium enterprises. “With courage, discipline and open minds, we begin our journey to build an economy whose resilience is not controlled by oil prices, but by our determination to reset the economy and finally give our people the chance they deserve.”