By Chinenye Anuforo and Chinwendu Obienyi
The Minister of Finance, Ms. Kemi Adeosun has disclosed that the Federal Government in the last 12 months, has approximately spent N1.2 trillion on capital projects.
The minister who disclosed this yesterday in Lagos at the 2017 Nigerian Stock Exchange (NSE)/ Bloomberg CEO Roundtable with theme, “Innovating out Nigeria’s recession: Exploring new paradigms for Nigeria’s economic growth”, said the FG had spent on roads alone over N200 billion and this is in contrast to N19 billion expended on roads in 2015.
She said, “In 2016, transport and aviation received N143 billion compared to N6 billion in 2015, this drive is coupled with important reforms in the ease of doing business and each will address the soft infrastructure that will enable businesses and commercial activities to flourish. We recognise that there is no point doing one without doing the other and two must be done at the same time.”
She noted Nigeria’s infrastructure deficit is so deep and so critical that the government cannot do it alone even if it is to dedicate the entire budget to capital projects.
“Therefore, it is critical that we must engage with the private sector and to this end, we intend to revive public private partnerships in Nigeria. We are presently reviewing the PPP framework but also we are trying to resolve outstanding issues with existing and even failed PPP projects and we do this because we recognise that until some of those legacy projects are resolved, no new investors will come in. So, we are moving backwards in order to move forward”, she explained.
She added that, investor confidence will grow as a function of how the government rectify the inherited proxy situation rather than how quickly it can open up opportunities.
Continuing, Adeosun argued that Nigeria’s private sector is extremely efficient, resilient and creative and there is a huge opportunity to partner with the private sector in the provision of infrastructure and social projects across many sectors but this needs to be de-risked. “We are working to achieve this and hope to introduce a new asset class of guaranteed instruments that will provide adequate safe guards for the engagement of private capital.”
However, the minister recognised that government ambitions cannot be financed by oil revenue and so the need for diversification.
Hear her, “Revenue mobilization is critical to the success of Nigeria’s economic reform agenda and we are working on strategies to drive non oil revenue and achieve inclusive growth. To do this, we must amend the low level of Nigeria’s tax compliance. A tax to GDP ratio of 6 per cent suggests widespread ignorance of our tax laws and we are working to amend this. Yesterday, we announced plans to recruit and train 7, 500 community tax liaison officers N-power scheme. These young people will be subjected to rigorous and intensive education on the tax system, sales and commission skills and civic education before being deployed to their respective communities to provide tax education to enroll new taxpayers. We have just 14 million active taxpayers out of an estimated 69.9 million who are economically active in Nigeria and of that 14 million, the majority are PAYE that is, those who have their tax deducted at source. This is not consistent with the structure of our economy where most people who are economically active are not formally employed but who are self employed.”