At last the federal government has bowed to pressure to raise it’s spending on infrastructure from 10 per cent to 30 per cent and to mobilise private capital for additional funding, in line with global standards. Kemi Adeosun, finance minister, said the government plans to spend N7.29 trillion in this year as against N6.06 trillion budgeted for last year. However, she said the government must source funds to cover a big shortfall in the budget, resulting from lower prices of oil.
Adeosun said she was committed to boosting capital spending across key areas, such as power, transport and water, which would help underpin growth in agriculture, mining and manufacturing. “We will now target 30 percent of government expenditure on infrastructure, up from 10 percent,” she said at an investor conference in Abuja.
The finance minister said that the government would tap private capital to complement its own expenditure, adding that fundraising was in progress for housing and road trust funds in partnership with the private sector. She said Nigeria wanted to move towards longer term funding at lower cost. The government has said it plans to borrow up to $10 billion this financial year, with about half coming from foreign sources.
Recently the federal government sold $1 billion worth of 15-year Eurobonds this month that were almost eight times oversubscribed. The government is now seeking approval from National Assembly to issue an additional $500 million Eurobond.