The Finance Minister has identified what she believes to be the main threat to Nigeria’s exit from recession and has already found a solution to it. According to her, the problem of the Federal Government (FG) now is sourcing of funds that would be used for capital projects which would eventually reflate the economy.
These projects according to Adeosun included roads, railway projects, housing and education, among others, and they would start off series of chain reactions that would eventually effect on the economy and impact positively on the populace.
She however stated that the biggest obstacle to such spending was the high cost of borrowing which would impact on the availability of funds for such projects. “One of the biggest issues for us is the cost of borrowing because, of course, government is the biggest borrower. So, what we had said from the beginning was that we look for cheaper borrowing to bring down our cost of borrowing. Currently, it’s cheaper to borrow internationally than to borrow locally.” ThisDay reports her as saying.
She stated that a solution was already in place as the FG and the Debt Management Office (DMO) were collaborating to source cheap foreign loans and restructure existing loans.
“…what we are looking at doing is working with the DMO to try and refinance some of the existing debt, not just the new debt… over the medium term to get lower interest rates. Restructuring will reduce the cost of our debt service, and increase the amount of money available for capital projects. That’s just really a strategy of getting us out of recession. It’s not just to spend the stimulus from government, but to spend on capital projects. That’s our priority,” she said.
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Parts of this article originally appeared in Thisday Newspapers