FEC approves MTEF for 2018-2020 to grow economy
• N100b for ICT infrastructure expansion
• Targets 2.3m bpd oil production
The Federal executive Council (FEC) has approved the Medium Term Expenditure Framework (MTEF) that will guide the preparation of Nigeria’s budget over the next three years.
Minister of Budget and National Planning, Udoma Udo Udoma, who gave the indication yesterday while briefing State House Correspondents after the meeting, said the period covered by the fiscal document commences from 2018 to 2020.
The minister explained that MTEF targets to grow the economy by seven per cent within the period. The growth target for 2018 was 3.5 per cent while that of 2019 was projected at 4.5 per cent.
“The highlights of it is that we are committed to achieving a 7 per cent growth rate by 2020 in accordance with the economic recovery and growth plan. “ Udoma added.
The Budget minister who was joined by the Minister of Information and Culture, Lai Mohammed and the minister of Communication Adebayo Shittu, said “in terms of crude oil production, our projection for next year is 2.3m bpd.’’
Similarly, the Minister of communications disclosed that council which was presided over by Acting President Yemi Osinbajo, also approved a total of $328 million (about N100 billion) for the expansion of Information Technology, broadband connectivity to Federal Government agencies across the country.
He said the project was part of the national ICT infrastructure backbone programme called NIPTI 2. Council also approved plans by the Federal Ministry of Finance to issue $3 billion about N900 billion worth of bonds to refinance maturing government Treasury Bills.
The plan, which will go to the National Assembly for approval, is meant to cut cost and extend debts maturity as well as relieve pressure on the country’s debt service.
The minister, Kemi Adeosun explained that this is not a new borrowing plan nor is it a plan to dollarise the economy but simply to exchange matured Naira treasury bills for dollars, adding that the rate of borrowing which are currently at between 13 and 18.5 per cent, will be halved by seven per cent which is the average international borrowing rate.
“We got approval to refinance treasury bills. As the treasury bills mature we will be refinancing them into dollars. $3 billion worth of treasury bills will be refinanced into dollars. So as the Naira treasury bills mature we will be issuing dollar instruments, we are not increasing our borrowing we are simply restructuring. Instead of borrowing Naira we are borrowing dollars,” she said.
Adeosun added that, the advantages are two folds, one it is cost reduction. The average rate at which we borrow internationally is at 7 per cent whereas our treasury bills we are paying between 13 and 18.5 per cent. We are almost halving the cost of borrowing and it is to try and relieve pressure on debt service. As you know our debt service is very high and one of the ways to try and do that is to refinance.