By Adedapo Adesanya
Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, has said that Nigeria would seek to encourage investments rather than rely on borrowing to create jobs.
Speaking on Monday, he said this would be the first priority that the new government would take as it tries to find a solution to sluggish growth, double-digit inflation, and a high debt burden.
The banker made this disclosure while speaking to reporters in Abuja after President Bola Tinubu held his first meeting with his new cabinet following last week’s swearing-in of ministers.
Mr Edun said the federal government is not in a position to borrow at this time, adding that the emphasis is on creating a stable environment to attract both local and foreign investments.
Mr Edun, an ex-investment banker, who was special adviser to Mr Tinubu on Monetary Policy before his appointment as minister, said he would focus on fixing Nigeria’s public finances.
“Clearly, the federal government is not in a position to borrow at this time. Rather, the emphasis has to be on creating a stable macroeconomic environment. Stable inflation, stable exchange rate, an environment within which people can come and invest and thereby increase production and further grow the economy. Improve and create jobs and reduce poverty,” he said.
“So, the aim of all reforms at this time is to focus on what we call equity to focus on investment to attract investment by Nigerians. Investment by foreign direct investors and even investment by portfolio investors who want to invest in the financial aspects of the Nigerian economy, such as the stock market, and the bond market.
“So that is the plan. That is the expectation that there will not be a reliance on borrowing. Rather, as revenues increase, the benefit of removing fuel subsidy and the subsidy on the exchange rate means more money for the government at all levels.
“Because, of course, through oil revenue, the federation earns Dollars, and if those Dollars are feeding through, at, let’s say, N700/N750 or so to $1 as opposed to N460 where it was before; clearly, that is repairing the finances of government at federal, state and local government levels.”
He added that the government’s naira revenues have increased from crude oil proceeds following a devaluation in June.
Nigeria’s economy has been battered by the weakening oil sector and the COVID-19 pandemic, which triggered two successive recessions in 2016 and 2020. The country has since exited that recession, but growth is still fragile, with the latest GDP figures showing a 2.51 per cent growth in Q2 2023.
Modupe Gbadeyanka