FG To Tap Private Capital, Boost Spending On Infrastructure

The Federal Government (FG) aims to raise the proportion of government spending devoted to infrastructure to 30 per cent from 10 per cent and to mobilise private capital for additional funding, Finance Minister Kemi Adeosun said on Thursday.Image result for Kemi Adeosun.
The government has laid out plans to spend a record N7.29 trillion in 2017, up from N6.06 trillion budgeted for last year, but must also find funds to cover a big shortfall in the budget resulting from lower prices for oil, its main export.
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 per cent of government expenditure on infrastructure, up from 10 percent,” she told an investor conference in the capital Abuja.
Adeosun said 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.
To help cover the deficit, the country sold $1 billion worth of 15-year Eurobonds this month that were almost eight times oversubscribed and the government is now seeking approval from parliament to issue an additional $500 million Eurobond.
Africa’s biggest crude producer has seen revenues plunge along with the price of oil and is mired in its first recession for 25 years.
Nigeria’s overall debt was 84 per cent domestic and 16 per cent foreign, but the government wants to move to 40 percent foreign debt by the end of 2019 to speed up infrastructure projects and cut borrowing costs.
On Thursday, the government said it will launch a N20 billion “green bond” in April to fund projects to reduce carbon emissions and develop renewable energy.
It also plans to raise a debut $300 million diaspora bond abroad and sell a maiden sovereign sukuk in the local market.
(C) Reuters News

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