Nigeria’s Minister of Budget and National Planning, Senator Udo Udoma, has said that the primary objective of government’s fiscal stimulus plan is not to sell off all major critical national assets but to source immediate funds to reflate the economy and implement capital projects in the 2016 budget.
Senator Udoma gave the explanation in Lagos at the weekend while briefing reporters on the forthcoming Nigerian Economic Summit.
He said the intention of the government was just to get enough money to fund the 2016 budget and get the economy back on the path of recovery.
Government, he stated, needed to inject a large dose of funds into the system to get the economy back on track and to faithfully implement the provisions in the capital budget tailored at reflating the economy and aiding the diversification process.
Senator Udoma further explained that the country had lost almost half its expected revenue and would need to urgently source for the shortfall to enable the government faithfully implement the budget.
“This unfortunate scenario prompted the Economic Management Team to urgently work out a fiscal stimulus plan to generate immediate large injection of funds into the economy through asset sales, advance payment for license rounds, infrastructure concessioning, use of recovered funds, among others, to reduce the funding gap.
“The other option would have been to source for additional loans, beyond the level of borrowing already projected for in the 2016 Budget.
“This would not be a wise option as it would raise the level of debt service to an unsustainable level.” a statement by the Minister’s spokesman, Akpandem James, read.
“Spend Our Way Out Of Recession”
Senator Udoma explained, however, that the government was exploring several angles in the asset sales proposal including repurchase options, which would make provision for buy-back of those assets when the situation improves.
The Minister insisted that the country’s economy may not have gone into recession but for the drastic fall in oil production levels due to disruptions caused by militant activities.
“At worst, it would have been a flat performance that would have sign-posted a new curve in the economy trajectory that would subsequently put it on the path to recovery and sustainable growth,” he pointed out.