₦airaland Forum

bloodyBLOGGER:
Nigeria now has a finance minister unlike the puff puff bean bag figure inflater called okonjo iweala the corrupt looter.

InvertedHammer:
It should be appreciated that she is trying to communicate with the masses.
Perusing through the "term paper", one can attest that she is a textbook minister. Everything she wrote could easily be written by a paid hand as a project.

Borrowing, financing, recurrent expenditures, taxes, inflation are terms that Nigerians have heard from successive governments from the 60s. Yet the end result is the same. Any article by Soludo, Iweala or Sanusi will tow the same laudable line of thinking but we know that they left the economy where they met it.
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There is sufficient diversity of opportunity which our capital investment can unlock. We will always celebrate the emergence of billionaires, of course, but we recognise that a thousand millionaires have greater fiscal impact. Therefore, where the number of private jets was touted in the past as a measure of success, we will take pride in the number of people lifted out of poverty, and the number of new jobs created.

Okeycima:
Wasn't it what GEJ is doing?.yet u guys criticized him and someone even had the boldness to as what did he do with FG share of ECA?-'oil is important but oil is not enough. Therefore, if faced with an option to invest borrowed funds in our railways or power or fund oil cash calls, we will strategically fund non-oil'. -KEMI

mars123:
don't worry you shall be delivered from the predicament your heroes have put you in.

tonio2wo:
Note! Its almost a year now. Keep apportioning blames.

mej67:
Please help point readers to the projected policies that are strategic.

Meanwhile hope you know the meaning of strategic. Or you believe that presenting a strategy means it is strategic.

Put simple, what in that writeup has potential to position Nigeria pivotally in the global coming of nations? Or project us into known economic blocks like BRICS?

Anyone who loves this woman should advise her against authoring such articles filled with wishlists and obvious contradictory policy positions. A monthly statement of activity showing progress and achievements and way forward is a more honourably way to connect with the outside world.

Or is she projecting that she's better as a columnist that a manager of national economy- our own Chancellor of Exchequer?

Kemy11:
NA to write article and blow fonee she sabi. Zombies need to meet TB Joshua for deliverance. See them above.








Provost wailers community typing from filling station

FinanceNigeria:
Financing our future
By Kemi Adeosun

Writing this, my third article on the economy, I’m keenly aware that the question Nigerians want answered is: what is government doing to address our economic challenges? The first thing to state is that there are no quick fixes, but our strategy is clear and the expected outcomes are pretty compelling. Our immediate economic imperative is to provide a Keynesian stimulus to reflate the economy. The 2016 focus is underpinned by a desire to radically reposition Nigeria’s economy. This administration believes very strongly that the previous direction was far from optimal. We are pursuing a fresh direction consistent with our belief in building a resilient economy.

The strategy itself is worth reiterating. The 2016 Budget is being debt funded and the borrowings are targeted at the financing of capital projects to address the infrastructure deficit, create jobs and build the platform for optimisation of the non-oil economy that will see Nigeria prosper. To this end, we have commenced an aggressive programme of fiscal housekeeping: increasing revenues and reducing recurrent expenses. This will ensure that we move towards our objective of financing recurrent expenditure from revenue, rather than borrowing as obtained before now.

In addition, we have signalled through our financial decisions that we are moving away from oil. Government investment in oil will be limited. We are inviting private sector participation in the funding of cash calls for our Joint Ventures rather than tapping the Federation Account. This is guaranteed to improve our cash flow. As I have stated previously, oil is important but oil is not enough. Therefore, if faced with an option to invest borrowed funds in our railways or power or fund oil cash calls, we will strategically fund non-oil. This is in the knowledge that there are private sector solutions to the funding needed for oil, but few sources other than government for investment in physical infrastructure.

The debate about whether Nigeria should borrow is well intentioned and cannot be dismissed without careful analysis, given our antecedents as a nation. I am in agreement with those who argue that Nigeria should not borrow simply because its debt to GDP level is low enough to accommodate such borrowing. There must be a clear business case backed by justifiable benefits. I believe that Nigeria has such a case at the present time. Simply put, we need capital investment to grow our economy. At 13% debt to GDP, we compare favourably with the threshold of 30% for developing economies. Our low debt to GDP ratio is not exactly a positive attainment because it is accompanied by critically low level of infrastructure investment. It is actually a false economy. Low capital formation is a risk which, if uncorrected, hinders future economic growth and this is already evident.

Borrowing, as we propose, will increase debt to GDP to 16% and still leave us significantly lower than our peer group including Ghana at 70%, South Africa at 50% (2015) and Angola at 31% (2014). Appropriate levels of fiscal deficit have been used to grow many of the most successful global economies. As ours develops, our sources of revenue will grow, diversify, and become less susceptible to external shocks. Our need to borrow will reduce accordingly. It’s important to note that capital spending creates an asset, and this gives a return over time in the form of growth. Infrastructural projects such as rail and roads create jobs, generate taxes and stimulate further spending. This is the economic multiplier effect that capital spending brings. Therefore, while an increase in public spending may create a deficit in the short term, the resultant increase in productivity will lead to a higher rate of economic growth and greater tax revenues. According to the International Finance Corporation (IFC), for every one billion US dollars invested in infrastructure in developing economies, between 49,000 and 110,000 jobs are created.

Our borrowing policy will remain conservative and will see us access the lowest available funds, hence our decision to approach multilateral agencies in the first instance, for budget support at concessional rates as low as 1.5% per annum. We have also secured commitments from Export Credit Agencies that are tied to specific capital projects including key initiatives in power, transport and other infrastructure, and at semi-concessional rates. The balance will be sourced commercially to create a blended cost of capital that’s as low as possible. We are addressing the relatively high debt service to revenue ratio which saw 28.1% of our 2015 revenues devoted to debt. This will be done through a systematic restructuring of inherited debt portfolio into a profile that is aligned with our medium term outlook as well as an increase in our revenues.
Borrowing is not our primary focus. Increasing our Internally Generated Revenue is critical because it is sustainable; and because much of the funds collected went unremitted to Government – something we are tackling now. Our Revenue Team holds daily revenue sessions with MDAs during which clear targets are set and agreed; monitoring and evaluation are continuous. We are deploying cash-less revenue collection processes in our high earning agencies to ensure maximisation of our receipts. We are working through Treasury Single Account balances with a view to identifying monies that can potentially be used to fund the budget and reduce borrowing.

Other costly leakages are being blocked. We have completed a detailed review of tax and duty waivers and discovered that in some cases, Nigeria lost significant revenues and with limited benefits. We are set to begin consultations with stakeholders on a revised policy aligned with the best interests of Nigeria.

Furthermore, we are identifying funds that can be released from hitherto untapped sources, including idle and underutilised government assets that have commercial potential including real estate. To this end, Ministry of Finance Incorporated (MOFI) is to become a professionally operated Asset Manager, rather than a passive holder of government assets. It will be actively managed to ‘sweat’ Nigeria’s very valuable global asset portfolio. This will generate earnings and constitute additional budget funding.

Gradually and with the requisite safeguards, we will authorise the investment of part of the estimated N6Tn currently held in pension funds into key infrastructure that will provide workers with higher returns on their pension funds while enhancing capital formation and economic growth. Nigeria’s first ever Project Tied Infrastructure Bonds are being designed. These are novel structures that will see borrowings tied to specific revenue generating projects, bringing private sector financial discipline to the project structuring and delivery process, thereby improving value.
Our first quarter-planned release of N350Bn is ready and is sure to have significant impact, in addition to exploring opportunities to reduce contract prices. Our conditions for release of funds are clear and the mandate is a simple one: to define and agree the number of Nigerians to be engaged as a result of this funding. Priority will be given, without apology, to those creating jobs and opportunity for Nigerians. This level of investment, predominantly capital, exceeds the total capital spend for the whole of 2015 and the tempo will be sustained until the green shoots of recovery begin to appear.

John Maynard Keynes’ famous quote on fiscal stimulus - that when economies are depressed, “Government should pay one man to dig a hole and pay another to fill it back” - is an extreme example and suggests an economic benefit in seemingly pointless activity. In Nigeria’s case, the activity to be triggered will be a fully productive one. We will pay men and women to meet our critical needs in power, transport, housing, agriculture, solid minerals, health and education - and lay the foundation for a collective future that is more positive than our current situation may suggest.
One of Nigeria’s greatest strengths is the resilience of her people. Even beyond our shores it is widely acknowledged that if you can survive in Nigeria, you can thrive anywhere. Our ability to overcome obstacles and our ingenuity in exploiting opportunities, are legendary; our economic policy will ensure more of us succeed in creating wealth. There is sufficient diversity of opportunity which our capital investment can unlock. We will always celebrate the emergence of billionaires, of course, but we recognise that a thousand millionaires have greater fiscal impact. Therefore, where the number of private jets was touted in the past as a measure of success, we will take pride in the number of people lifted out of poverty, and the number of new jobs created.

The idea that Nigeria can succeed this time is, for some, unthinkable. But for those of us privileged to be part of this determinedly patriotic team led by President Muhammadu Buhari, it is and will be possible.

Mrs. Kemi Adeosun is the Honourable Minister of Finance, Federal Republic of Nigeria.

Follow the Federal Ministry of Finance on Twitter:

https://twitter.com/FinanceNigeria

Like the Federal Ministry of Finance on Facebook:

https://www.facebook.com/FinanceNigeria/

plaetton:
Kindly elaborate, quote or point out the so-called future economic DIRECTION.
And pls, while you are at it, perhaps you can point out in what way it different or even more practical than vision 2010 and other lofty economic plans we have heard of over the past 30yrs.

The finance minister is doing what all finance ministers do; Selling or promoting her government.

Her write-ups are too vague, short on specifics. Just the normal mumbo jumbo that we are used to hearing from finance ministers.

plaetton:
Thank you for saying so well what I could not find the right words for.

We've seen that, been there and done that.

So what else is new ?

Freiden:
In summary pls

mej67:
Please help point readers to the projected policies that are strategic.

Meanwhile hope you know the meaning of strategic. Or you believe that presenting a strategy means it is strategic.

Put simple, what in that writeup has potential to position Nigeria pivotally in the global coming of nations? Or project us into known economic blocks like BRICS?

Anyone who loves this woman should advise her against authoring such articles filled with wishlists and obvious contradictory policy positions. A monthly statement of activity showing progress and achievements and way forward is a more honourably way to connect with the outside world.

Or is she projecting that she's better as a columnist that a manager of national economy- our own Chancellor of Exchequer?

plaetton:
I didn't see any specific policies.
Just ambiguous textbook economic postulates.

Nothing we haven't heard before from previous finance ministers.

The contradictions are glaring here, which just goes to prove there is no core policy thrust of this Administration.

This explains why the finance minister of a nation in the midst of an economic emergency, finds enough time to pen useless and shallow economic treatises to a populace too busy looking for fuel to power their vehicles and generators.

First of all, what are the so-called economic priorities of a government that budgets N29b for agriculture and N49 for propaganda ?

Aside from being duplicated, inflated and padded, can someone, perhaps Kemi Adeosun herself, pls tell us what is sooooo revolutionary about this budget ?

Where is the boost in education, health, and labour ?
It's certainly not in the budget ?

Less reliance on oil, and N50b for oil exploration ?
Who are you kidding ?

What single measure has this government implemented to boost non-oil exports ?

My friends in the non oil exports sector tell me that this government's new policies and new bureaucracies introduced are strangulating them.
What gives ?

And talking of borrowing, if you borrow this much just to fund this year's padded budget , how much will we have to borrow next year and the year after ?

Does anyone Smell a DEBT trap and sinkhole by 2019?
I do.

Hello Greece, Hello Argentina.
He goes a borrowing, who goes a sorrowing.


If the previous government could grow our economy year after year with very low DEBT to GDP ratio, then shouldn't we at least be praising them for prudent financial management ?

Isn't it just common sense to prudently manage what we have now, rather than borrowing for CAPITAL projects that are even yet to be specified, let alone blueprinted for ?

So we want to borrow first, and then figure out what specific capital projects to spend the money on ?

Lol.
If the President did not study his budget proposal before presentation to Parliament, then We all have to wonder when he found the time to decide and plan the specific capital projects for which we are to borrow several billion dollars.

Dear Kemi Adeosun, your UNICORN MEAT of an economic analysis is dead on arrival.

Kindly give us the real UNICORN MEAT.

APC , feeding grade A UNICORN MEAT to Nigerians since 2015AD.

Obiagelli:
Loads of bullsh.t, mention me is you are up to it

KINGinVALHALA3:
I must applaud your rhetorical prowess, but I feel you re displaying the characteristic of an average black man; Criticizing without profiling a solution.

You can't move forward without outlining your goals, visions and what you plan achieving and outlining these sometimes has to do with you jotting it out, and I feel that's what Kemi has been doing. Its is called Master Plan.

Other master plans by former finance ministers and economic experts not working doesn't mean we should put an end to it. There is something called benefit of doubt and that's what is expected from Nigerians right now because this is a govt whose budget hasn't even been passed or just been passed by NA.

You complained about her not listing out these capital projects this govt plans executing with the money they planned borrowing; hey bro, its was even on nairaland i think last month, a thread outline these capital projects, its locations and the geo political zones with the highest and lowest projects in 2016 budget.

You said we can do without borrowing this year; No, we can't do without borrowing. Even country with bigger GDP and Economic than Nigeria also plan borrowing this year to support their 2016 budgets, e.g Qatar, Brazil, US, etc. So how does ours becomes bad and suicidal?

Borrowing, as we propose, will increase debt to GDP to 16% and still leave us significantly lower than our peer group including Ghana at 70%, South Africa at 50% (2015) and Angola at 31% (2014). Appropriate levels of fiscal deficit have been used to grow many of the most successful global economies. As ours develops, our sources of revenue will grow, diversify, and become less susceptible to external shocks. Our need to borrow will reduce accordingly. [b]It’s important to note that capital spending creates an asset, and this gives a return over time in the form of growth. Infrastructural projects such as rail and roads create jobs, generate taxes and stimulate further spending. This is the economic multiplier effect that capital spending brings. Therefore, while an increase in public spending may create a deficit in the short term, the resultant increase in productivity will lead to a higher rate of economic growth and greater tax revenues. [/b]According to the International Finance Corporation (IFC), for every one billion US dollars invested in infrastructure in developing economies, between 49,000 and 110,000 jobs are created.

pheliciti:
'Gradually and with the requisite safeguards, we will authorise the investment of part of the estimated N6Tn currently held in pension funds into key infrastructure that will provide workers with higher returns on their pension funds while enhancing capital formation and economic growth. Nigeria’s first ever Project Tied Infrastructure Bonds are being designed. These are novel structures that will see borrowings tied to specific revenue generating projects, bringing private sector financial discipline to the project structuring and delivery process, thereby improving value'

There are several new ideas there, one of which is quoted above.... of course that's if you read it and more importantly, if you understand it.

pheliciti:
'Gradually and with the requisite safeguards, we will authorise the investment of part of the estimated N6Tn currently held in pension funds into key infrastructure that will provide workers with higher returns on their pension funds while enhancing capital formation and economic growth. Nigeria’s first ever Project Tied Infrastructure Bonds are being designed. These are novel structures that will see borrowings tied to specific revenue generating projects, bringing private sector financial discipline to the project structuring and delivery process, thereby improving value'

There are several new ideas there, one of which is quoted above.... of course that's if you read it and more importantly, if you understand it.

HonNze:
Nonsense! #bringback okonjo#

plaetton:
I didn't see any specific policies.
Just ambiguous textbook economic postulates.

Nothing we haven't heard before from previous finance ministers.

The contradictions are glaring here, which just goes to prove there is no core policy thrust of this Administration.

This explains why the finance minister of a nation in the midst of an economic emergency, finds enough time to pen useless and shallow economic treatises to a populace too busy looking for fuel to power their vehicles and generators.

First of all, what are the so-called economic priorities of a government that budgets N29b for agriculture and N49 for propaganda ?

Aside from being duplicated, inflated and padded, can someone, perhaps Kemi Adeosun herself, pls tell us what is sooooo revolutionary about this budget ?

Where is the boost in education, health, and labour ?
It's certainly not in the budget ?

Less reliance on oil, and N50b for oil exploration ?
Who are you kidding ?

What single measure has this government implemented to boost non-oil exports ?

My friends in the non oil exports sector tell me that this government's new policies and new bureaucracies introduced are strangulating them.
What gives ?

And talking of borrowing, if you borrow this much just to fund this year's padded budget , how much will we have to borrow next year and the year after ?



Does anyone Smell a DEBT trap and sinkhole by 2019?
I do.

Hello Greece, Hello Argentina.
He goes a borrowing, who goes a sorrowing.

If the previous government could grow our economy year after year with very low DEBT to GDP ratio, then shouldn't we at least be praising them for prudent financial management ?

Isn't it just common sense to prudently manage what we have now, rather than borrowing for CAPITAL projects that are even yet to be specified, let alone blueprinted for ? ??

So we want to borrow first, and then figure out what specific capital projects to spend the money on ?

Lol.
If the President did not study his budget proposal before presentation to Parliament, then We all have to wonder when he found the time to decide and plan the specific capital projects for which we are to borrow several billion dollars.

Dear Kemi Adeosun, your UNICORN MEAT of an economic analysis is dead on arrival.

Kindly give us the real UNICORN MEAT.

APC , feeding grade A UNICORN MEAT to Nigerians since 2015AD.