The Minister of Finance, Mrs. Kemi Adeosun, has stressed the need to reposition the nation’s economy to be investment -driven, to be able to come out of the present doldrums.
Adeosun who made this position known at the just concluded 2016 FBNQuest Investor Conference, in Lagos, explained that since the fall in the oil price had exposed the vulnerability of the strategy of over-reliance on a single commodity, making the nation’s economy investment- driven remains the only alternative.
“The philosophy around the economy during this recession is to move it from a consumption-driven economy to an investment-driven economy,” Adeosun stated.
Adeosun also called for a change in spending patterns by moving from 10% capital expenditure and 90 per cent recurrent expenditure, to 30/70 split through the inclusion of private investment and infrastructure.
This, she stated, would increase revenue and create headroom for capital expenditure, needed to drive the economy.
“For many years we have been just an extractive economy, we pump oil and we basically export the crude and import everything else that we need. However, the fall in the oil price has exposed the vulnerability of that strategy and we need to now reposition the Nigerian economy to become investment driven.” She added.
She attributed most of the challenges currently faced in the economy to lack of infrastructure, arguing that such infrastructure deficit must be tackled for the economy to become more productive and competitive.
Adeosun explained that the proposed $30 billion loan, which the Federal Government intends to take, would be used to fund planned infrastructural projects and would be phased over a three-year period, spanning 2016 to 2018.
The minister also disclosed that the Federal Government had commenced a review and revision of the cost profiles of revenue generating agencies, with the aim of ensuring that maximum operating surpluses are declared and remitted in compliance with the fiscal responsibility.
She identified the increase in tax revenue as a key area where the present government had made significant progress, adding that the Federal Inland Revenue Service (FIRS) had commenced an aggressive policy of sensitising the people on the need to pay their tax.
“The Federal Inland Revenue Service (FIRS) said it has generated N2.7 trillion in just nine months, with the FIRS Chairman, Babatunde Fowler explaining that revenue from oil and non-oil sources as at September 2016 represented 81 per cent of the third quarter cumulative target of N3.12 trillion in the 2016 budget,” she added.