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| Minister of Finance, Mrs. Kemi Adeosun |
Nigerians voted for change and to attain
it there is a need to do things differently, in the recognition that
doing what we have always done will only result in more of the same.
That change has started with the ongoing offensive against corruption,
which has had a huge and adverse effect on our economy. Much of the
debilitating underinvestment in our infrastructure that has handicapped
our economic growth has arisen because funds were diverted to enrich a
few at the expense of the wider populace. At the lower levels, the
waste, inefficiency and culture of non-performance have, like a
financial cancer, eaten away at our core institutions. We are already
beginning to see change. The slide towards self-destruction has slowed
down but we must now work collectively to ensure that we exploit the
upside from our situation.
Globally the downturn has hit all
nations, rich and poor alike. The manners in which governments have
intervened to protect their economies have been diverse and innovative.
What is abundantly clear is the fact that the previous consensus about
what is best for the global economy is rapidly changing. There is a
concerted move towards individualism rather than collectivism. The new
normal for the global economy is that there is no normal; each nation
must painstakingly work out the best path to follow.
For Nigeria, we believe that the best
path to follow is to invest in infrastructure that will unlock the
potential in the non oil sectors. We can transit from being a commodity
economy to an industrialised and regionally dominant one. Oil is
important, but clearly, oil it not enough. Iran is a very recent and
relevant example of living without oil. The sanctions that embargoed
Iran’s oil led to the development of robust petrochemical and other
export industries that enabled the country to survive. Iran survived
without oil, made tough decisions and is now being feted by investors as
the next growth story.
The focus of our economic policy is to
redress the infrastructure deficit, unlock the rich diversity in the
economy with a determined and focused turn-around programme. For us, it
would be a tragedy to have endured so much pain and not emerge better
and stronger. The provision of a spending stimulus to the economy is
critical to releasing the upside in the economy. Investing specifically
in power and transportation will release the opportunities in solid
minerals, manufacturing and agriculture.
However, government spending alone is
insufficient to bridge the infrastructure gap and there is a need to
embrace private capital to provide additional impact. We are at an
advanced stage of reforming the process for Public Private Partnerships
to provide a seamless pathway to attracting much needed private,
financial and operational input to service delivery. Private capital
brings more than financial resources; it also brings discipline and best
practice, creating a benchmark against which the utilisation of public
money can be measured.
It is important to link the fiscal
housekeeping initiatives that we have started with the wider economic
strategy. Specifically, questions around the focus on corruption and the
elimination of ghost workers, controlling inefficient spending and
preventing revenue leakages need to be evaluated in the context of how
it impacts our ability to stimulate the economy. We have been increasing
our level of borrowing annually and much of that is used to fund
recurrent spending. Indeed in 2015 just 10 per cent of spending went to
capital items. We spent more on travel, training and stationery than on
roads. No nation has ever developed with such consistent underinvestment
in capital.
Growing the economy at a rate that will
address the employment needs of our huge population requires a
fundamental change in how government collects its revenues and spends.
The 2016 budget is deficit financed; and the fiscal housekeeping which
is aggressively blocking revenue leakages and reducing costs is firmly
aimed at ensuring that the borrowed funds are channeled into capital
projects, rather than seeping through an inefficient financial
management system. This is not only prudent economics but it is a moral
necessity, since these borrowings will be repaid by future generations.
Therefore, while we focus fully on the macroeconomic indicators; we must
and will continue to focus on the micro factors which collectively
shape and determine the larger picture.
The road map to attaining our objectives
is a tough one. We may endure the financial pain for longer than
we would prefer, but the upside is that we have actually already endured
the worst part of the adjustment cycle. The outlook for oil prices is
looking more positive but we are fundamentally determined to ignore oil.
One word that will resonate across all that we do in government is
‘Discipline’. Financial discipline is going to be a game changer in
shaping the future of Nigeria’s economy.
Our focus will make sure that ‘every
naira counts’, irrespective of its source. The government is ready and
determined to lead this crusade of financial responsibility. The big
questions are:
Is the populace ready to do the right thing in their respective areas of operations? Are we willing to be frugal and conservative in expenditure? Are we as custodians of the nation’s
wealth willing to manage the resources entrusted to us with care,
knowing that someday we will be called to account?
Are we willing to confront those who mismanage our collective wealth regardless of the consequences? Dare we look at what worked successfully in the 1950s and 1960s, and then modernise and re-enact them? Dare we look at global trends and courageously invest in our forecasted choices?
Nigeria stands on the threshold, daring
to move into previously uncharted territory through identifying and
embracing novel economic and fiscal policy stratagems that will release
our considerable upside. We are for innovation to create a new workable
path, courage and discipline to implement and build a resilient economy
that is not controlled by the oil price.
- Mrs. Adeosun is the Minister of Finance, Federal Republic of Nigeria
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