The Nigerian government plans to get a budget support fund of N1.2 trillion, to be generated through a Special Purpose Vehicle (SPV) to help cushion the disruptive effects of the Coronavirus on the funding of the 2020 budget.
The over N10 trillion budget faces a huge deficit following poor revenue from crude oil sales on the international market as a result of the spread of the Coronavirus.
Central Bank Governor, Godwin Emefiele, who said this as part of the resolutions from the roundtable held in Abuja on Wednesday, noted that the SPV will have participation from the federal government and the players in the financial sector as well as key development finance agencies.
The SPV will be used to mobilize close to N1.2 trillion in funds from banks, pension funds, and other financial institutions, to fund road, power, and port infrastructure.
The money will provide support funding to six major road projects and three seaport projects. The projects will be identified through a framework currently being worked on under the SPV and will be ready for implementation by October 2020.
“When implemented the SPV will help to reduce the burden of government financing of infrastructure projects and enable the government to focus on funding other priority areas,” Emefiele said.
The SPV will also reduce the cost of transporting goods across the country for farmers, SMEs and Manufacturers. It will also help improve the Nigerian economy’s capability to attain double-digit growth rates.
The annual event had made recommendations last year which were useful in assisting the CBN design policy measures that led to the generation of about N1.9 trillion in credit to the real sector at low-interest rates, between May and December 2019.
Other key recommendations at the 2020 event include the need to ensure Nigeria’s self-sufficiency in the production of key goods and services, going forward; how the country can improve broadband penetration considered critical in enabling Nigerians to access the benefits that come with greater utilization of technological applications, as well as the need to improve agriculture and manufacturing productivity.
The participants noted the need for innovative financing schemes that will require minimal collateral from farmers and SMEs.
They also called for more emphasis on improving the processing of 6 key commodities such as palm oil, dairy, cassava, wheat, aquaculture, and sugar, adding that “ increased processing of these commodities could lead to the creation of over 1m jobs over the next two years.”
One area highlighted for improving broadband penetration was the need to “create a one-stop-shop that investors could interface with in order to reduce multiple taxations.”