The Minister of Finance, Kemi Adeosun has said that she does not want to predict when the country will get out of the economic recession, adding that the Federal Government is focused on getting the economy to grow, thus getting it out of recession.
PUNCH reports that Adeosun said this at an interview in Abuja. She said that the Federal Government’s efforts are already yielding results.
“I don’t want to predict when we will get out of recession. Let me tell you that we will get into growth and that’s how you get out of recession, because of the stimulus that we are providing.
And it may take longer than we would like, but we will definitely get out of it. We are already seeing some positive signs in agriculture and solid minerals;and with what we are trying to do with other sectors, I am very sure we will get out of it soon,” Adeosun stated.
Recall that the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele had recently said that the economy will start getting out of recession by the fourth quarter.
Adeosun disclosed that lots of foreign investors are still interested in coming into the country.
She also said that the Federal Government has not yet decided on which assets to sell and the sale arrangement.
“I think there are a number of assets that are being considered and I don’t think we have said this one or that one. There are some unused assets that are just lying idle, which people have come and suggested that ‘these things you are not using, can we lease them from you for money?’
Hence, when they lease them from us, the taxes are still going to come to us. So, there are some things the government is sitting on, we don’t have money to do it, it makes sense for me to unlock those things. So,they bring money into the economy at these difficult times so that we can move forward.
We have not got to the stage of saying it’s this asset, or that. But it’s more of the conversation around should we just keep on borrowing or shall we know that things are a lot more difficult than we envisaged and turn on to an alternative strategy, which is looking at some of the underutilised assets and releasing them.
We think that the infrastructure challenges that we face are so serious and the kind of money that we need, we can’t borrow. When you have an accumulated deficit, you need to look for the money that will sustain what you are doing for the next three to four years.
That is what we are doing, having more of a strategic approach so that over time, we will borrow less, and which of course is good,” she said.
Adeosun said that the sale arrangement for the assets will depend on the class of asset.
“There are some assets which you can lease and others you may need to divest from. The investor will also have to look at the risks and the pricing. Some assets just make sense to just leave them and there are some, which you may just sell but still hold on to the majority stake.
So, it makes sense and you can sell to the Nigerian people and list on the Nigerian Stock Exchange. So, there are different kinds of sales,”she added.
On borrowing and the failure of the Monetary Policy Committee (MPC) to reduce the interest rate, the minister said:
We are looking at a range of options and one of the biggest issues for us was the cost of borrowing. Of course, the government is the biggest borrower. So, what we have said from the beginning was that we will look for cheaper funds to bring down our cost of borrowing.
Currently, it is cheaper to borrow internationally than to borrow locally.So, we are working with the Debt Management Office to try and refinance some of the existing local debts into external to get lower interest rates and to structure them over the medium term.
That will reduce our cost of debt servicing and increase the amount of money available for capital projects, which is really our focus.