Nigeria plans N4.72 trillion stimulus for troubled economy

Minister of Finance, Kemi Adeosun
Minister of Finance, Kemi Adeosun

The Federal Government is considering an ambitious $15 billion (N4.72 trillion) fiscal stimulus plan to reflate and pull the economy from the current recession.

Following the National Bureau of Statistics (NBS) recent official confirmation that Nigeria’s economy had slipped into one of the worst recessions in its history, the government convened a ministerial retreat last week to rally economists’ opinions on possible way out of the doldrums.

One of the key resolutions at the retreat was a four- pronged funding plan to generate and inject massive foreign capital, estimated at between $10 and $15 billion (about N4.72 trillion – at N320 to the dollar) into the economy.

The Minister of Budget and National Planning, Udoma Udoma, said the stimulus plan would be funded majorly through sale of some national assets, advance payment by joint venture operators for license renewals, infrastructure concessions, use of recovered funds etc, and long term, low interest loans to bridge funding gap.

In line with the external borrowing plan approved recently to enable government borrow cheapest available monies to fund key ongoing projects, the Minister of Finance, Kemi Adeosun, said on Friday plans had been concluded to raise additional $1billion through Euro bond capital raise.

Besides, Mrs. Adeosun said the World Bank, African Development Bank (ADB), and other multilateral and international lending institutions, have already approved plans for loans at interest rates of 1.5 per cent, and repayment tenors as long as 40 years.

She said the facilities would help the government intervene in some key areas, like agriculture, education, health, rebuilding of transportation facilities, railway and other projects considered vital to government effort to revamp the economy.

The minister, who justified the request for emergency economic powers for government, said in view of the “unusual times” the country found itself, “unusual measures were required to navigate the economy out of recession waters.”

One of the areas for which she said the intervention was necessary was in pruning the procurement processes to speed up contract awards, to execute key infrastructure needed to drive quick economic recovery.

Mr. Udoma said the government was equally giving a thought to measures to fast-track procedures to speedily inject the funds into the economy.

Some of these measures include Presidential Orders and Directives, to be facilitated by emergency powers, to be enabled by the Emergency Economic Recovery Bill currently pending submission to the National Assembly for approval.

Other components of the plan, which have already been approved by the Executive Council of the Federation include total restructuring of the country towards sustainable growth, by weaning the economy from dependence on crude oil revenue.

Resolutions at the retreat include the need for government to work closely with the private sector to bridge the N3 to N5 trillion funding gap per annum in infrastructural development; need for the government to signpost the future of the country’s economy to the world and open up infrastructure investment opportunities.

The retreat also emphasized the breaking of government monopoly in all areas of the economy, while taking steps to improve the communication of government initiatives, to reassure the public and stimulate private sector investment.

To ensure quick injection of fresh capital to the economy, the retreat proposed the immediate implementation of the social intervention programmes, namely the school feeding, the teachers’ assistance scheme, and local debt repayment, particularly to states and contractors.

In addition, priority attention must be given to infrastructure, including power, rail and public works; agriculture and agro processing; mining and solid Minerals; social intervention schemes/ public works; human capital development; and population census to facilitate accurate data for planning.

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  • Egbuhuzor Chinomso Collins

    A well articulated plan.

    • Broadway2

      I tell you. I dey feel am oo

  • arewethishopeless

    Three important elements to consider in the overall agricultural revolution plan. The rural road and rail networks and water storage and irrigation plans for rural areas. Access to markets via small rural road and rail networks primarily for movement of farm produce will give the agricultural sector a big boost. So also all the rain water we waste in flooding and evacuation into main rivers every rainy season. They should be collected, stored and available for you during the dry season.

    Without the right steps now, food insecurity will only worsen in 5 years as the population continues to explode. We should stop paying lips service to planning and start laying the right foundations for the future.

  • LionHeart

    Good plan. Build infrastructures and improve power supply to attract foreign investors. Change the tax system to make high income earners and big firms pay more tax and there will be diverse means of revenue for the government.

    • Powerlessconscious

      To be frank, we have to clarify this foreign investors issue. It is NOT HEALTHY for a country to have too much foreign investors because the wealth of that country can be taken away anytime. For example, let us assume Dangote is a foreign investor and he said he want to close down his business in nigeria, WHAT DO YOU THINK WILL HAPPEN TO NIGERIA? There every developed nation only request for foreign investors base on the fact that local citizen is not expert to handle the investment. Nigerians can handle all constructions and agriculture except technology. If what nigerians can do is not given to foreigners, the wealth of the nation will be preserve. nigeria local investors can not take their wealth to anywhere because Nigeria is their country but a foreign investor can tell government he is going back to his country and he has to take his money along including the profit he has made in nigeria. How many foreign investors are in China. China will only allow you on what they can not produce. Nigeria should follow the same line. God bless Nigeria.

      • LionHeart

        This is what is making other nations great. I live in a Western Country and I can see how foreign investors and small businesses are contributing to the economy and creating jobs for the masses. If you invest in a foreign country and you are making a good ROI, why would you want to move the business some where else? Don’t forget that Nigeria is a very big economy and very rich in manpower. And when I am talking of foreign investors, I mean international companies you can find across the globe that are not in Nigeria. There are heaps of them who would want to invest in Nigeria and stay in Nigeria as they are in other countries but if there are no good roads and constant power supply, how can they operate successfully?

        When you want to diversify the economy, you have to create a conducive environment for investors, think out of the box. It is not all about natural resources or turning Nigeria to a production ground like China. There are thousands of other big investors and companies out there that we need to attract into industries like supply chain and food.

      • Otile

        The headless government of Buhari does not know this.

  • Clario

    So so talk and no action!!!! Everyday all we hear is “we are planing to” when there is already fire on the mountain!!! What brand of nonsense is this government?

  • Mohd Sageer

    Now they are talking…. Every sane and intelligent economist will profer the same solution. Thats why they need to be involving professionals in their decision making as the previous measures of with holding the money through increased intrested rate and all the fiscal policies applied will only plung the country deeper in to recession. But for this idea they need to implement it immediately no need of contemplating.

    • Otile

      You cannot grow the economy with a bunch of corrupt Buhari close relatives coupled with this unintelligent woman called Finance Minister.

  • share Idea

    Why I agree with the submission that FDI is very crucial for the country, and infrastructure plays a big part in attracting them.

    I still disagree with this administration that refused to address the fundamental problems, and expect FDI to increase.

    Without proper policy and rule of law, Nigeria will only manage to attract FDI from people that are desperate to milk the country. We are all in this country when we were told that car manufacturing companies will never setup factory because of lack infrastructure. However, when the success story of Innoson started making waves, so many of the big companies started rushing to setup assembling plants in Nigeria – Charity begins from home.

    There is inherent fears in Nigerian entrepreneurs that if you are not in good terms with ruling party, trump charges can be made against you, and before you say bingo, EFCC will freeze your account. If Nigerians are being treated like I have suggested in this global world, how do we expect FDI to increase in the country.

    I know of several Nigerians that are being advised against sending money home for investment in the country because of so much uncertainty. Nigeria is a big country with so many successful people around the world, and so many of them are willing to bring in so many investors, but when the climate is not investment friendly, how will such people convince their networked friends to bring in investments.

    Closely related to the above is issue of the administration not having someone visible that can be pointed out as being in charge of the economic policy. When you hear Udo Udoma speak and compare his speech with that of Finance minister / VP, you will kind of get vivid impression that these people are not really working as a team. We expect that whenever each one of them speak to the public, they should be repeating same conclusion arrived at their joint meetings which is not the case at the moment. Nigeria we hail thee

    • Otile

      My brother, don’t forget that this administration is running Nigeria on a feudal system. Nigeria is doomed with this kind of system. Udo Udoma is only a figure head, the dullards in the cabal are the ones running the show.

  • Otile

    It is shameful that up till today Mohamed Buhari has not sacked corrupt Dambazau & Dubai $Millionaire Burutai. Fighting corruption my foot.

  • Iweka Okparaocha

    “The federal government is considering the ambitious $15 billion (N4.72 trillion) fiscal stimulus plan to reflate and pull the economic from the current recession”. In infrastructural development, example roads, railroad and rivers or ocean dragging, do not discriminate against South East and South-South region because they needed it the most, and it will aid for the development of united Nigeria. The region has been neglected in the past. Also the President does not need emergency powers and the sale of Nigerian assets to accomplish his goals, rather he needs to apply the knowledge of microeconomics and macroeconomic to achieve the recession problem that the Nation faces. I could be of great assistance if Nigeria needed me.