By Chinwendu Obienyi
The Federal Government plans to release N100 billion for capital projects to take its total spending in the 2017 budget for infrastructure to N440.9 billion by next week, the Finance Minister, Mrs Kemi Adeosun, has said.
Mrs Adeosun, who stated this said yesterday in Abuja at the Joint Finance and Appropriation Committee Sitting on the Implementation of 2017 Budget, said the Federal Government has spent N1.5 trillion on re current expenditure so far.
“We concluded our Sukuk last week, the money will be pushed out this week. As money comes in, we push it out,” Adeosun said. Last week, DMO sold N100 billion in debut sukuk in the local market to finance road projects
Meanwhile, the Minister has said that there is need to lower interest rates charged by the commercial bank so as to reduce the demand for treasury bills.
She added that the Finance Ministry was appealing for approval to refinance about $2 billion worth of treasury bills.
Her words: “One of the strategies that we have for bringing down interest rates is that we reduce the demand for treasury bills and that brings us back to the issue of re-financing. As you know, we are appealing for approval to refinance about $2billion worth of treasury bills. When we do that, the demand for treasury bills reduces.
“What is happening at the moment is that as the treasury bills are maturing, we are rolling them over when we don’t roll them over, we begin to reduce the demand for treasury bills and the headline interest rate should begin to come down”.
“The Finance Ministry and the Central Bank of Nigeria are aligned and we are working together in the interest of the economy, but as the biggest borrower, we want interest rate to be lower and we are working as hard as we can but our side is to try and refinance some of the existing domestic borrowings and also we have to be very careful of crowding out the private sector. We have got to come to the market a little bit to allow the private sector to come because that is the stimulus that is needed to create the jobs”
On salary arrears, she said majority of the arrears are part of the promissory note program, adding that her Ministry was discussing with various committees on what it needs in order to solve the issue of salary arrears.
“What has been happening is that there has been N10billion a month release, started four months ago and it has continued. But the majority of the arrears are part of the promissory note programme. It is a long standing problem, some people have not had promotional arrears for years and we have been discussing with various committees on what we will need, what we will be requesting from the National Assembly to finally put a line to this issue of salary arrears because it is humiliating and causing hardship”, she said.
The Finance Minister thereafter stressed the need to enhance capital spending as the2017 budget was simply not big enough, adding that the mobilization of private sector capital is needed to achieve the Economic Recovery and Growth Plan (ERGP).