FG to pump N350bn to stimulate economic activity, growth

The Federal Government is set to pump at least N350 billion  to stimulate economic activity and growth in the economy.

The monies which would come from the finance ministry would be spent mostly on capital projects like infrastructure with job creation capacities to put Nigerians back to work. This would include construction companies that have laid off staff.

  Nigeria’s economy is reeling from a fall in crude oil prices. Economic growth in the last quarter was 2.1 percent, while total growth recorded in  2015 was 2.8 percent, the slowest since 1999 according to data released by the National Bureau of Statistics (NBS).

Finance Minister, Kemi Adeosun, briefing journalists at the end of the two-day National Economic Council (NEC) retreat at the conference hall of the Presidential Villa, said this was part of the decisions reached.

“From the Federal Ministry of Finance, in anticipation of the approval of the budget , we have virtually lined up about N350billion which we would be pumping into the Nigerian economy in the forthcoming months.

“We explained our rational and the processes that we have put in place, safeguards to ensure that this money actually achieves the desired objective, which is to stimulate the economy.

“We are already discussing with some of the contractors who will be paid these monies and the objectives from the overall criteria is how many Nigerians would be re-engaged. We are specifically looking at contractors who have laid off staff and how many Nigerians are you going to put back to work as a result of this money that we are planning to release and we believe that this would bring significant economic activity” she said.

Adeosun said the retreat which was the first of its kind, deliberated extensively on the drop in revenue, particularly as to how it affects the state government and their ability to pay salaries and fulfill other obligations.

According to her, the general resolve of the house and consensus was that there was a need to bring in more cost efficiency in the operations of government, specifically the setting up an efficiency unit within the state governments, to rationalise expenditure and of course to increase IGR. To that end there was a need to generate data because data is the basis of any revenue collecting efforts.

There is also a need to develop incentives for both federal and state revenue generating agencies, to ensure that there is an alignment of interest between the two arms of government.

The governors, Adeosun said, were tasked to focus on property and consumption taxes in their states to help improve their revenue in a fair manner. “Tax payer education must be intensified and to expand the tax base and ensure that there is a buy-in in the revenue collection agencies from the populace” she said.

State governors were also encouraged to where possible, rationalise the numbers of commissioners and general political appointees, as well as adopt cost control measures to be able to sustain their states.

NEC also discussed the need to review the counterpart funding needed to access the Universal Basic Education Commission (UBEC) fund from 50 percent to 10 percent. The states currently need to have a counterpart fund of 50 percent to access the fund, if reviewed it would become a 10 and 90 percent contribution.

According to the minister, this will release an estimated “N58 billion that is currently un-accessed and it was discussed that with that money, we could possibly address around 1,000 of the worst classrooms in each of the 36 states and rehabilitate them and of course, this would also create jobs and economic activity”.

  Discussions also included the need to get a “legislative approval to change the need for counterpart funding on the part of state governments which we feel is putting them further into debt, to reduce that requirement from a temporary period to 10% from the current 50%”.

Still on the resolutions, the council set 2018 as the target for attaining self sufficiency in rice and wheat production in the country

It also agreed to meet with the challenges of the economic downturn by increasing revenue through diversification of the economy.

This was disclosed by the Budget and Planning Minister, Udo Udoma who was also at the post NEC retreat briefing.

Udoma said government is revamping agriculture and has asked state government to choose two crops in which they have comparative advantage to develop in their various states.

He said the state governors have also been directed to open up hinter lands by providing feeder roads for the transportation of farm produce to city centers

Also agreed according to Udoma, was the implementation of an industrial revolution plan with attendant training to encourage employment.

This, he said, includes the  rejuvenation of the National Directorate of Employment and other forms of training centers for artisans.

Anambra State Governor, Willie Obianor also spoke on the need for increase in infrastructures.

 

 Elizabeth Archibong