Business Briefs
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IN defence of the hardship Nigerians are currently passing through, Yemi Osinbajo, Vice President, has said that passage of the 2016 budget into law would stimulate the economy and make live better for the citizenry. He said the budget will stimulate the economy rather than impose undue austerity on the citizens contrary to the fear of many.
Osinbajo who stated this at the First National Economic Forum organised by The Nation Newspaper in Lagos, said the government was aware of the overwhelming challenges confronting Nigerians, assuring all that the ongoing reforms in various sectors point to the fact that the situation will soon be a change.
“It is pathetic that a nation with over 170 million people benchmarked its budget on the price of oil. We must look beyond oil because it disturbs us from looking at other sectors. In order to move the country forward, we must reduce the Federal Government’s and states’ dependence on sharing revenue made from oil sales.
“The foundation for a strong economy demands that we have appropriate fiscal policies that will help the country that is arising from a very low rate of VAT and a low taxpayer’s base. We are focusing on increasing the country’s taxpayers’ base. We are committed to expanding the tax net. For instance, 30 percent of the country’s budget has been earmarked for capital expenditure. Non-oil sources, comprising company income tax, VAT and others, are expected to contribute N1.5 trillion, which is more than the estimated revenue from oil. This is unprecedented in the history of the country.”
Osinbajo said the federal government will not reverse the privatisation in the power sector because the government is not known to be good managers of businesses. He outlined the government’s position on job creation, the power situation and a myriad of other burning issues, including infrastructure.
According to him, what happened to the former national telecommunication firm NITEL and the defunct Nigeria Airways are enough example to prove that government should not be directly involved in running businesses. He said the government would sustain the privatisation of the power sector while it continues its push for the provision of gas to power the existing power generating plants.
Nigeria, according to Osinbajo, has in excess of 12,000 megawatts of installed generating capacity, but it has just about the chance of wheeling only about 5,000 mw. He pointed out that much investment is required to provide the transmission infrastructure to transport the excess to the end users. “Even if we transmit the 5,000megawatts currently generated, over half of it will be lost because of inadequate infrastructure.”
Osinbajo, who sympathised with Nigerians for the harrowing experience of the lingering fuel scarcity, said the government is pushing for co-location of refineries to the existing ones to increase refining capacity, adding that the building of railway lines would be intensified to increase volume movement of goods and petroleum products at reduced cost.
On projects, Osinbajo mentioned the Lagos-Ibadan Expressway and the Benin-Ore road as among the 33 the government has scheduled for completion, but the government is not considering starting new projects. On rail development, he said the federal government was in the process of completing the Abuja-Kaduna rail line. The Lagos-Kano rail and the Lagos-Calabar rail axis, are among top priority projects.
— Apr 18, 2016 @ 01:00 GMT
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