The minister said Nigeria would also cut capital expenditure.
The Federal Government said on Monday that it plans to cut recurrent expenditure by 65 per cent in 2015 to boost economic growth.
The Minister of Finance and Coordinating Minister for the Economy, Ngozi Okonjo-Iweala, said at the Renaissance Capital’s Fourth Annual Pan-Africa Investor Conference in Lagos that the capital expenditure would be sliced by 40 per cent.
According to the minister, the gains from the reduction would be redirected at critical areas of the Nigerian economy to ensure economic growth and reduction in unemployment rate.
“Government is correcting past fiscal lapses to achieve the desired result, and we will continue to slide down on recurrent expenditure,” she said. “The major challenge of the government is the rising unemployment rate, currently at 23 per cent, and all economic reforms are geared toward job creation.”
Ms. Okonjo-Iweala said that the government would aim to reduce domestic debts in 2013 with the issuance of N100 billion redeemable bonds, adding that the economy has been growing at an average of seven per cent in the past decade in spite of the challenges.
The minister, who said that government plans to establish a development finance institution to provide long-term finance for businesses as well as strengthen economic growth, commended Renaissance Capital for its confidence in Nigeria and Africa, which has seen it bring in a lot of investors.
The Governor of the Central Bank of Nigeria, CBN, Lamido Sanusi, urged government to address the problem of infrastructural inadequacies to ensure economic growth, pointing out that the cost of production in Nigeria had remained high due to security challenges, lack of power and bad roads.
He said that the apex bank would continue with its tight monetary policies, adding that while the Monetary Policy Committee, MPC, would not be in a hurry to reduce the current lending rate, government should develop the non-oil sector of the economy to enable it depend less on oil revenue.
The Chief Executive Officer of Renaissance Capital, West Africa, Yvonne Ikeh, said that Africa was experiencing a great revolution in terms of investment inflow, adding that Nigeria was well positioned to lead the African revolution due to its various economic reforms.