The federal government has restated itsdetermination to achieve the recovery of slowing GDP
growth and to forestall the remote possibility of recession throughfull implementation of the 2016 budget. The assurance was given by the Ministerof Finance, Mrs. Kemi Adeosun in press statement made available to the media.
Noting that the focus of the current administration is to stimulate the economy and achieve a real GDP growth rateof 4.2 per cent by the implementation of the draft 2016 budget, the minister added that the administration was also determined to reduce the cost of governance, extract efficiencies in public service and enhance revenue collections. The administration plans to increase government expenditure on infrastructure i.e. transport, roads, housing and Power with a view to achieving a substantial increase in gross capital formation and to fund the budget deficit and the negative trade balance in a cost effective and efficient manner, which will keep the government within the acceptable debt sustainable ratio that is expected of most emerging economies. In the article entitled, ‘Nigeria’s Economy:The Road to Recovery’, the Minister who acknowledged the impact of the slidingoil prices on the Nigeria’s economy said, “Our main macroeconomic
objective isto use a government expenditure-led growth strategy in 2016, combined with astimulant approach based on injections of more efficiently collected revenues and blocking of leakages. The combination of these fiscal injections willhave a catalytic multiplier effect on the GDP growth rate.” ”The budget deficit is estimated atN2.2trn or 2.16 per cent of GDP based on an estimated benchmark oil price of $38pb. In view of present realities and the dynamics in the global oil markets, we have braced ourselves for the probability of a further decline in oil prices. Even though we believe the average price of oil in 2016will recover, we have developed a shadow budgeting process with tactical responses to build in the
flexibility in our borrowing needs. This way, we will not undermine the fundamental principle of the economic stimulus model used by countries facing a contraction in economic activities and growth.” Adeosun pledged the resolve of
the current administration to go ahead with its robust commitments on infrastructure despite the present oil price.
She said, “We are firmly committed to the countercyclical budget expenditure model. Therefore we will not reduce our investment in infrastructure i.e. transport, roads, housing and power. Our deficit will expand by N0.8trn to N3trn, which will be 3percent of GDP. This is still within the comfort zone for the international rating agencies.”