The Nigerian government says it will inject N350 billion to stimulate its economy, which is facing a severe crisis occasioned by falling oil prices.
Nigeria’s economic growth in the last quarter stood at 2.1 percent. The total growth recorded in 2015 was 2.8 percent, the slowest since 1999, according to data released by the National Bureau of Statistics, NBS.
Briefing journalists at the end of a two-day National Economic Council (NEC) retreat at the conference hall of the Presidential Villa, the minister of Finance, Kemi Adeosun, said the N350 billion would be spent mostly on capital projects and job creation.
“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 rationale and the processes that we have put in place, safeguards to ensure that this money actually achieve 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.
“We believe this would bring significant economic activity,” she said.
Ms. Adeosun said the retreat, which was the first by the present administration, deliberated extensively on the drop in revenue, particularly as to how it affects the state government and their ability to pay salaries and fulfil other obligations.
According to her, the general resolve of the council 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 rationalize expenditure and to increase IGR.
She said there was a need to generate data because data is the basis of any revenue collecting efforts, just as there was a need to develop incentives for both federal and state revenue generating agencies to ensure alignment of interest between the two arms of government.
The governors, Ms. 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, rationalize the number 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 UBEC grants,
Upon review, it would become 10 and 90 percent contribution.
According to the minister, this will release an estimated “58 billion naira that is currently un-accessed”.
The minister said the council discussed that with N53billion, Nigeria could revamp at least 1,000 of the worst classrooms in each of the 36 states.
She said the council also discussed getting a “legislative approval to change the need for counterpart funding on the part of state governments”.