The Nigerian government has commenced payment into the Excess Crude Account, ECA, Finance Minister Kemi Adeosun has said.
Mrs. Adeosun, who said this on Monday, said the payment was in line with efforts to rebuild the nation’s fiscal buffers.
Mrs. Adeosun made this disclosure while speaking at The Platform, a programme organised by Covenant Christian Centre, in Lagos on Monday.
According to the finance minister, for the first time since the Muhammadu Buhari administration took office in 2015, the government last month paid $87 million into the ECA.
She said, “Even though things are difficult, we are saving. As you know, when we came in, we gave the Sovereign Wealth Fund (SWF) an extra $500 million and we are still going to do more. We cannot afford to waste because we don’t have money to waste.”
The minister said foreign investors were interested in investing in Nigeria, adding that “Long-term investors are now looking at Nigeria and saying it is time to come in.
“On Thursday, we had a group of Japanese… We are not talking about people that are bringing in sachets of things to come and sell here, we are talking about people that want to set up factories to manufacture transformers. We are talking about industrialists. They are coming back into Nigeria because Nigeria is showing that it is serious.
“We have taken the pains. Often, the medicine that does it the best is the bitterest medicine and we have had very bitter medicine in the last one year. But now, we would have the long-term benefits in terms of growth and jobs.”
Commenting further, the minister said the Nigerian government recently revived the Development Bank of Nigeria, saying it was a development finance institution project that started under the previous government.
She explained that the bank would have $1.3 billion of capital that would be lent to microfinance and banks, specifically for on-lending to SMEs.
“Actually, our economy is 50 per cent driven by SMEs and only 10 per cent of them have access to loans,” she said.
“So, if you begin to improve their access to capital, you can rapidly grow jobs and businesses.”
Commenting on the policy direction of the government, Mrs. Adeosun said, “We are going to build an economy that really doesn’t care about what the price of crude oil is. There are 180 million of us in the country and we have two million barrels of oil per day.
“Kuwait has 3.9 million people and three million barrels of oil per day. So, we can’t afford to continue to behave like an oil economy. An oil economy simply pumps the oil out, then use the dollars to buy everything they need.
“That is the economic model that Nigeria has largely been following. We export crude oil and then we buy everything. We don’t add value, we don’t get any of the by-products and that means that Nigeria has become a very unproductive economy. That is not the intention of the Nigerian dream.”
The minister also disclosed that a recent study showed that only 214 individuals pay tax in excess of N20 million, saying that the government would take measures to broaden the tax base.
“Oil has made us extremely lazy. The truth is that what we spent monies on in the past were all on wrong things. We are now suffering the effects of the things that were done three years ago.
“When we started the whistle-blowing policy, people were saying why should we pay somebody five per cent?
“But our argument was that, what about the person who stole 100 per cent? Why fixated on the person that is getting five per cent to bring the money back,” she said.
On concerns expressed in certain quarters about the Nigerian government’s increased borrowing plans, the minister said there was need to borrow, provided the borrowings are being judiciously used.
“If you spend money on the right thing, you get the right results,” she said.
“We do have to borrow because if we have to wait for oil price to recover, we would be in recession for a very long-term and use the money to develop capital projects,” she added.