ABUJA FEBRUARY 23, 2017 – Federal government aims to rise the proportion of government spending devoted to infrastructure to 30 percent from 10 percent and to mobilise private capital for additional funding, Finance Minister Kemi Adeosun said on Thursday.
The government has laid out plans to spend a record 7.29 trillion naira in 2017, up from 6.06 trillion naira 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 percent 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 percent domestic and 16 percent 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 20 billion-naira “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.
