World Economy

Nigeria Plans $15b Stimulus

Nigeria Plans $15b Stimulus Nigeria Plans $15b Stimulus

The federal government is considering a $15 billion (N4.72 trillion) fiscal stimulus plan to reflate and pull the economy from the current recession.

Following the National Bureau of Statistics recent official confirmation that Nigeria’s economy had slipped into one of the worst recessions in its history, the government convened a ministerial retreat last week to rally economists’ opinions on possible way out of the doldrums, NAN reported.

One of the key resolutions at the retreat was a four-pronged funding plan to generate and inject massive foreign capital, estimated at between $10 and $15 billion into the economy.

The Minister of Budget and National Planning Udoma Udoma, said the stimulus plan would be funded majorly through sale of some national assets, advance payment by joint venture operators for license renewals, infrastructure concessions, use of recovered funds etc, and long term, low interest loans to bridge funding gap.

In line with the external borrowing plan approved recently to enable the government to borrow cheapest available money to fund key ongoing projects, the Minister of Finance Kemi Adeosun, said plans had been concluded to raise additional $1 billion through Euro bond capital raise.

Besides, Adeosun said, the World Bank, African Development Bank and other multilateral and international lending institutions, have already approved plans for loans at interest rates of 1.5%, and repayment tenors as long as 40 years.

She said the facilities would help the government intervene in some key areas, like agriculture, education, health, rebuilding of transportation facilities, railway and other projects considered vital to government effort to revamp the economy.

 Need for "Unusual Measures"

The minister, who justified the request for emergency economic powers for government, said in view of the “unusual times” the country found itself, “unusual measures were required to navigate the economy out of recession waters.”

One of the areas for which she said the intervention was necessary was in pruning the procurement processes to speed up contract awards, to execute key infrastructure needed to drive quick economic recovery.

Udoma said the government was equally giving a thought to measures to fast-track procedures to speedily inject the funds into the economy.

Some of these measures include presidential orders and directives, to be facilitated by emergency powers, to be enabled by the Emergency Economic Recovery Bill currently pending submission to the National Assembly for approval.

Other components of the plan, which have already been approved by the Executive Council of the Federation include total restructuring of the country towards sustainable growth, by weaning the economy from dependence on crude oil revenue.