…Pledges support if called upon
By Amechi Ogbonna
The International Monetary Fund (IMF), on Thursday, urged Nigeria to step up its economic reform efforts before the opportunity for reforms becomes more limited. Addressing a news conference in Washington DC, yesterday, IMF spokesman, Gerry Rice, noted the country urgently needs to implement a coherent set of policies to ease the constraints posed by the country’s economic recession before opportunities for low hanging fruits evaporate.
Responding to questions on the struggling Africa’s economic giane, the IMF spokesman stated that, “urgency is needed in implementing a coherent and credible package of monetary, fiscal and structural policies as the window for bold reforms is closing with approach of the 2019 general election.”
Rice also confirmed that the Nigerian authorities have not approached the global lender about a programme but assured the IMF “stands ready to help should the country make a request for financial assistance.”
Meanwhile, the Minister of Finance, Mrs. Kemi Adeosun, has, said the Federal Government would raise the proportion of government spending devoted to infrastructure to 30 per cent from 10 per cent and would mobilise private capital for additional funding.
The Federal Government has laid out plans to spend a record N7.29 trillion in 2017, up from N6.06 trillion budgeted for last year, but also needs to find funds to cover shortfall in the budget resulting from lower prices for oil.
But, Adeosun said she was committed to boosting capital spending across key sectors like power, transport and water, to help drive growth in agriculture, mining and manufacturing.
“We will now target 30 per cent of government expenditure on infrastructure, up from 10 per cent,” she told an investor conference in Abuja.
The Minister 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 also said Nigeria wanted to move towards longer term funding at lower cost as part of government’s 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 and the government is now seeking approval from parliament to issue an additional $500 million eurobond.
Nigeria’s overall debt was 84 per cent domestic and 16 per cent foreign but the government wants to move to 40 per cent foreign debt by the end of 2019 to speed up infrastructure projects and cut borrowing costs.
On Thursday, the government said it will launch 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.