The Federal Government may have pegged its annual capital spending at around N1.3 trillion according to Minister of Finance, Mrs Kemi Adeosun.
This is despite provisioning much higher in the three budgets that President Muhammadu Buhari has so far sent to the National Assembly since his administration commenced in 2015.
Adeosun who made this revelation while discussing with a group of foreign investors who visited her on Tuesday said the government was committed to investing N1.3trillion annually on capital projects to bridge the infrastructure gap required to attract investments into the economy.
In 2016, National Assembly approved the capital expenditure of N1.5 trillion but the government reported an eventual spending of N1.2 trillion for the year.
The ongoing 2017 budget has a provision of N2.17 trillion (excluding transfers) but a total of N1.3 trillion has so far been released going by official statistics.
Again in the 2018 proposal still being debated by National Assembly members, President Buhari has asked that N2.6 trillion be approved for him for capital spending.
The consortium was made up of representatives of investment capital and equities firms from London, New York, Miami, Johannesburg and others led by a former Minister of Finance, Shamsudeen Usman.
“Government invested about N1.3 trillion on capital projects last year (2016) to develop roads, rail, power, housing and all the infrastructure government thinks would be needed to unlock this huge economy,” the Minister said adding “hopefully, the figure would be around the same for 2017 and 2018.”
She said “It’s a great time for investors to be in Nigeria. For us, it’s a better time now than last year because finally, we think that we are beginning to address through deliberate policies some of the most stubborn problems that have held back Nigeria’s growth.
“We’ve gone through a very difficult adjustment but we are seeing that the macroeconomic fundamentals are much more positive and the outlook is that they will remain positive.
“The goodness is that the narrative that we have been adopting around the reason for our reliance on oil we have actually beginning to take steps in terms of reducing our benchmark price by keeping it low, allowing us to rebuild some of our buffers.
“Our budget is predicated on lower oil price, and for me, we are discussing on revenue because we think that is the missing part of the Nigeria jig-saw.
“We always to increase our tax to GDP ratio from six percent to an initial target of ten and the long-term goal is to be around the 15 to 20 percent range.”
“The outlook for Nigeria’s economy is very positive. We are very optimistic about our prospects. We can’t afford to abandon the reforms government is committed to. There are still major decisions to be made on the policy. We think the fiscal space to make those decisions are beginning to open up. We will certainly address those issues,” she said.
“The FDI flows are back. Hope that it would be sustained. The fundamentals of the economy are supporting the growth. The picture we get is that Nigeria has finally gotten the chance to get it right. That’s what investors have always been waiting for,” she added.
Earlier, leader of the delegation and Managing Director, Global Chief Economist, Renaissance Capital, Charles Robertson, had said that the collectively worth of investments by the various firms in the consortium totals about $1billion.
He said the objective of their visit was to have firsthand experiences with policymakers on what drives the positive sentiments about Nigeria’s economy and what the future outlook and investment climate is like.
According to him, “there is a lot of optimism in the global market about Nigeria.”