…Earmarks N60bn for social intervention
BY Nse Anthony-Uko,
ABUJA (Sundiata Post) – The Federal Government on Friday announced the release of N350 billion as additional funds for the implementation of capital projects captured in the 2016 budget, and raise S1 billion dollars from Eurobonds by December to ease the recession.
This is on top of the initial N420 billion released since May bringing total capital so far released to N760 billion since the budget was passed.
Aimed at reviving the crashed economy, the government has approved borrowing from the African Development Bank, China, Japan and World Bank with rates of 1.25 per cent and a 40-year maturity.
Minister of Finance, Mrs Kemi Adeosun, who made these known during a media interaction in Abuja, said that particularly, N60 billion from the release has been cash backed to fund the social intervention programme of the federal government as a means of stimulating activities and reflating the economy by putting money into people’s pockets.
Besides social intervention, the federal government’s focus on capital spending remains targeted at the big ministries such as Power, Works & Housing; Defence; Agriculture, Interior, Health as well as Transport.
Adeosun the government has planned to reflate the economy by increasing demand to stimulate growth, in order to make the recession as short as possible.
“When an economy is in recession, demand goes down because confidence goes down, people don’t have enough money to spend and there’s no enough money circulating in the system. That can feed on itself. What government wants to do is to step in and begin to spend and push more money into the economy and then get things moving again.”
Adeosun said that with the N60 billion released for social intervention, the federal government would commence the disbursement of N5,000 to the poor and most vulnerable people as well as the School Feeding programme and the Teachers’ Call programme.
“The N5,000 to some of the most poor and vulnerable, the home school feeding programme, which is very important. That will also generate some economic activity in a lot of our local governments with women and maybe men cooking for the children and then the Empower, which is the Teacher Call; the graduates that are going into primary schools as teachers will begin to get salaries/stipends from the end of the month.”
At the state governments levels, Adeosun said a lot of work has been through the budget support to ensure that states resume payment of salaries so that there can be money for people to spend.
“We have also done a lot of work with the Sub-national governments around the budget support plan. As we know, many of them have not been paying salaries for months. We have now been able to support them with additional money every month from the FAAC account and many of them have now resumed paying salaries.
“We are monitoring, because the loan facilities were conditional. We have sent the monitoring and evaluation committee out to go and check that they are actually doing what they undertook to do and we are pleased to report that many are paying salaries and that will also have a huge effect on demand and help to get the economy moving.”
So far, N50 billion has been made available each month for the past three months to support states to pay salaries.
The minister appealed to Nigerians to be patient, that the effect of these spending would soon become evident.
She said the lag has been due to delay in procurement process adding that the ministry was working with the Bureau of Public Procurement (BPP) to truncate the process.
According to her, plans were also on for the federal government to stop funding cash calls from the federation account adding that this was taking a lot of toll on the revenues of government.
“This month for example, we only got N41 billion from oil. We had to use N110 billion to fund cash calls. If we had that money we could have pumped it into the economy.
We are working with the Ministry of Petroleum Resources and NNPC to get out of the cash calls that is the long term plan, to allow those joint ventures to borrow money that they need rather than taking money from the federation account and that will improve the money in circulation” she said.
Speaking on the Eurobonds, Director General of the Debt Management Office Dr Abraham Nwankwo, they are accepting proposals from international and local banks to sell Eurobonds until Sept 19, 2016.
“And days after that, we will fast track the process of vetting, screening and selection. All borrowing would be used for capital projects. In raising the money we are ensuring that local transaction partners, local banks, must be involved,” Nwankwo, said.
