The Federal Government aims to raise the proportion of the government spending on infrastructure to 30 percent from 10 percent and to mobilise private capital for additional funding, Finance Minister Mrs Kemi Adeosun said at the weekend.
The government plans to spend N7.29 trillion in the year, up from N6.06 trillion budgeted for last year, but must find funds to cover a big shortfall in the budget, resulting from lower prices for oil, its main export.
Mrs Adeosun said she was committed to boosting capital spending across key areas, such as power, transport and water, which would help underpin growth in agriculture, mining and manufacturing.
“We will now target 30 percent of government expenditure on infrastructure, up from 10 percent,” she said at an investor conference in Abuja.
Mrs Adeosun said the government would tap private capital to complement its own expenditure, adding that fundraising was in progress for housing and road trust funds in partnership with the private sector.
She said Nigeria wanted to move towards longer term funding at lower cost. The government has said it plans to borrow up to $10 billion this financial year, with about half coming from foreign sources.
To help cover the deficit, the country sold $1 billion worth of 15-year Eurobonds this month that were almost eight times oversubscribed. The government is now seeking approval from National Assembly to issue an additional $500 million Eurobond.
Africa’s biggest crude producer has seen revenues plunge along with the price of oil and is mired in its first recession for 25 years.
Nigeria’s overall debt was 84 percent domestic and 16 percent foreign, but the government wants to move to 40 percent foreign debt by the end of 2019 to speed up infrastructure projects and cut borrowing costs.
On Thursday, the government said it would launch a N20 billion “green bond” in April to fund projects to reduce carbon emissions and develop renewable energy.
It also plans to raise a debut $300 million diaspora bond abroad and sell a maiden sovereign sukuk in the local market.