Ifeanyi Onuba, Abuja
The Minister of Finance, Mrs. Kemi
Adeosun, has said that she cannot predict when the nation will get out
of the current economic recession.
She, however, said that some of the efforts of the government to reflate the economy had started yielding results.
The minister, who spoke in an interview
in Abuja, stated, “I don’t want to predict when we will get out of
recession. Let me tell you that we will get into growth and that’s how
you get out of recession, because of the stimulus that we are providing.
“And it may take longer than we would
like, but we will definitely get out of it. We are already seeing some
positive signs in agriculture and solid minerals;and with what we are
trying to do with other sectors, I am very sure we will get out of it
soon.”
The Governor of Central Bank of Nigeria,
Mr. Godwin Emefiele, had last week stated that the country would start
getting out of recession by the fourth quarter of the year.
He had said, “We are already in the
valley, the only direction is to go up the hill and the government is
doing everything possible to ensure that we move up the hill. I am
optimistic that based on the actions being taken by the monetary and
fiscal authorities, the fourth quarter results will show evidence that
we have started to move out of recession.
“The worst is over. The Nigerian economy
is on the path of recovery and growth. So, please if you are a
bystander or sideliner, you are losing; join the train now before it
leaves the station.”
To facilitate the recovery of the
economy from recession, Adeosun said about N770bn had been channelled
into the economy for various capital projects this year, adding that the
monitoring team in the Ministry of Budget and Planning was putting
contractors on their toes to ensure that they delivered the projects.
Investors interested in Nigeria
The minister explained that despite the
recession, lots of foreign investors were still interested in coming to
invest in Nigeria.
As a demonstration of their interest in
the country, she said the $1bn Eurobond being floated by the country had
received a lot of commitments from investors, adding that the funds
would start coming in before the end of the year.
Adeosun added that the report of the committee set up last month to review the national tax policy would be ready this week
No final decision on asset sales
She also said that the Federal
Government had yet to take a final decision on which of the country’s
national assets it would dispose of to finance the 2016 budget.
The position of the minister is against
the widely held belief that the government has concluded plans to
dispose of some important national assets such as the Nigerian Liquefied
Natural Gas, the Nigerian National Petroleum Corporation and the
refineries.
The planned sale of the assets is being
opposed by the organised labour, civil society organisations, industry
stakeholders, professional bodies and financial analysts.
But Adeosun said while the government
was mindful of the feelings of Nigerians, it was currently faced with
serious financial challenge, which had made it imperative to raise funds
from other sources.
She said the government recognised the
fact that funding could be raised through borrowing, but lamented that
this was not the best option now owing to the huge infrastructural
deficit in the country.
The minister added that the type of
financial resources needed to fund critical projects that would unlock
the economic potential of the country could not be raised from
borrowing, hence the need to dispose of what she described as
underutilised national assets.
She said, “I think there are a number of
assets that are being considered and I don’t think we have said this
one or that one. There are some unused assets that are just lying idle,
which people have come and suggested that ‘these things you are not
using, can we lease them from you for money?’
“Hence, when they lease them from us,
the taxes are still going to come to us. So, there are some things the
government is sitting on, we don’t have money to do it, it makes sense
for me to unlock those things. So,they bring money into the economy at
these difficult times so that we can move forward.
“We have not got to the stage of saying
it’s this asset, or that. But it’s more of the conversation around
should we just keep on borrowing or shall we know that things are a lot
more difficult than we envisaged and turn on to an alternative strategy,
which is looking at some of the underutilised assets and releasing
them.”
She added, “We think that the
infrastructure challenges that we face are so serious and the kind of
money that we need, we can’t borrow. When you have an accumulated
deficit, you need to look for the money that will sustain what you are
doing for the next three to four years.
“That is what we are doing, having more
of a strategic approach so that over time, we will borrow less, and
which of course is good.”
When asked what type of sale arrangement
the government was considering for the national assets, the minister
said this depended on the asset classes.
She said, “It depends on which one.
There are some assets which you can lease and others you may need to
divest from. The investor will also have to look at the risks and the
pricing. Some assets just make sense to just leave them and there are
some, which you may just sell but still hold on to the majority stake.
“So, it makes sense and you can sell to
the Nigerian people and list on the Nigerian Stock Exchange. So, there
are different kinds of sales.”
Lending rate reduction
When asked if she was disappointed that
the Monetary Policy Committee of the Central Bank of Nigeria did not
reduce the benchmark lending rate to make domestic borrowing attractive
as suggested by her,the minister said the government would explore other
cheaper sources of funds, particularly from international institutions.
She said, “We are looking at a range of
options and one of the biggest issues for us was the cost of borrowing.
Of course, the government is the biggest borrower. So, what we have said
from the beginning was that we will look for cheaper funds to bring
down our cost of borrowing.
“Currently, it is cheaper to borrow
internationally than to borrow locally.So, we are working with the Debt
Management Office to try and refinance some of the existing local debts
into external to get lower interest rates and to structure them over the
medium term.
“That will reduce our cost of debt
servicing and increase the amount of money available for capital
projects, which is really our focus.”
N500bn new housing fund
In a bid to stimulate activities and
return the economy to the path of growth, Adeosun said a mass housing
scheme that would make Nigerians become homeowners under a mortgage
arrangement would commence in the next three to four weeks.
She said under the initiative known as
the ‘Family Home Fund’, the sum of N500bn had been earmarked to create
mortgages for affordable houses for Nigerians, starting with the
construction of 100,000 houses annually from next year.
According to her, the housing fund is
expected to increase from N500bn to N1tn to make it possible for the
government, through the private sector, to deliver about 400,000 houses
annually through mortgages.
The mortgage, according to her, will be
created at a single digit interest rate of 9.99 per cent payable in 20
years, with homeowners making an initial deposit of 10 per cent.
She said the low and middle-income
earners would benefit more from the scheme as about 70 per cent of the
houses would be given out for between N2.5m and N4.5m depending on the
type.
Adeosun said, “We have done a lot of
work around how we can bring down the cost. The tag is N2.5m and it is a
house you can move into. So, we are bringing down the cost.
“These are affordable houses for
Nigerians;the scheme is going to be linked with the BVN. One house per
person; so, you cannot buy the house and rent it to somebody else.”
![Latest Job Vacancies at The Delta State University [2 positions]](http://3.bp.blogspot.com/-ltyYh4ysBHI/U04MKlHc6pI/AAAAAAAADQo/PFxXaGZu9PQ/w200-h150-c/no-image.png "Latest Job Vacancies at The Delta State University [2 positions]")
