The Federal Government has said that one of the policy planks of President Mohammadu Buhari’s administration is to return the nation’s ailing economy to robust growth through the diversification of revenue base currently dominated by the oil and gas.
The Minister of Finance Kemi Adeosun, who stated this when she was the guest of Channels Television’s Sunrise Daily on Thursday where she provided answers to several question bordering on the management of the country’s economy and plans to solve its current economic challenges said the main economic strategy of the Buhari administration is to reset the Nigerian economy to have a more diverse revenue base and to cut wastage in government’s spending.
Adeoson reaffirmed an earlier statement by President Muhammadu Buhari that the government inherited an empty treasury, in addition to a high debt profile and these have made things difficult, adding that the previous administrations in Nigeria failed to build savings while the country enjoyed massive revenue from high price of oil globally, a situation, which she said put the country in a tight condition when the oil price fell.
She regretted that the mono-economic nature of the nation’s economy which made the country to dependent solely on oil made the impact much tougher on the economy and the citizens.
“What we are now trying to do is reset the economy so that we never end up in this situation again; and how do we do that? We have to have a more diversified economy, a more diversified revenue base.
“If you look at oil, its only 13% of our GDP but it represent 70% of government’s revenue which means if anything happens to oil, it affects everybody.
“The question we are trying to now resolve is; the remaining 87% of GDP, why is it contributing so little to government’s revenue? If we are able to have those other revenues which are much more stable, predictable and less volatile, then if the oil price goes down, we’ll be able to maintain some level of stability.”
Another area the government is looking at is to ensure that when monies are spent, they are spent effectively.
“We have looked at what government has been spending money on; only 10% was spent on capital while 90% was spent on recurrent items like salaries, travelling, training and so on and those things don’t grow the economy, capital (expenditure) is what grows your economy.
“This budget that is being finalized has a 30% commitment to capital and we have said we want to maintain that commitment,” she said.
She mentioned power generation, roads, rail, housing as some of the areas where the capital expenditure would cover as these are the core areas that create jobs and empower the citizens to develop the economy.
She also spoke about efforts to encourage governors to replicate these measures in their states.