Nigeria’s Minister of Finance, Dr Ngozi Okonjo-Iweala, has said there is a need for attention to be paid to diversification of the country economy, as many African countries are now discovering oil.
Making a Presentation of the 2014 budget and a review of the performance of the 2013 budget in Abuja, Dr Okonjo-Iweala stressed that the contributions made by the non-oil sector to the economic growth recorded in 2013 must be sustained in order for the country to shift away from so much dependency on oil.
Dr Okonjo-Iweala pointed out that the number of African countries involving in oil drilling is increasing, forecasting that by 2025 almost all African countries will be listed among the oil producing countries.
“Nigeria has to wake up and sustain the non-oil contribution to the growth of our economy recorded in 2013,” she said.
In 2013, Nigeria’s economy grew by 6.5 per cent driven by growth in the non-oil sector.
The minister pointed out that the budget is a statement about the government fiscal policies and related policies that were designed to move the economy forward.
“It is not about resources allocated to various sectors but also about new fiscal policies that will stimulate growth in various sectors of the economy,” she said, responding to issues raised about the low allocation made to capital expenditure in the budget.
Dr Okonjo-Iweala emphasised that the impact of the policy may make resources available to the sector to generate funds that were 10 times the amount seen in the budget.
Critics have said that the budget christened ‘Budget of Inclusive Growth’ would not be able to grow jobs in Nigeria.
But the Minister said that the government used the budget process as an occasion to launch policies that could leverage significant resources outside of the budget to help grow the economy, create jobs to the benefit of Nigerians.
“The whole set of industrial incentive policies are a deliberate act of government policies that will enable the creation of jobs.
“It enables the manufacturing industries to be competitive and be able to expound and create jobs.
“Job creation is linked very well to the policies of the government.
“Some people think that these policies are policies that lead to fraud. In the past, these policies were not applied the way they should. They have been restructured and revamped so that it would be on sectorial bases and everybody operating within the sector has equal opportunities,” she said.
Dr Okonjo-Iweala explained that the budget was transparent and detail to the point that “it goes down to buying plates, folks, knifes and food in the State House.
“I am proud about the level of detail in the budget that allows Nigerians to see down to the last Naira and what it is spent on.
“It is designed to engage the debate to show them exactly where the money is going.
Nigeria’s budget process is becoming difficult and more challenging for the Executive and the Legislature to agree on key parameters but the Minister suggested that Nigeria should develop a system where an objective and depoliticised process should be adopted for some of the parameters to be considered to be able to move the budget expeditiously.
“It will remove the rancour from the system. We should look at adopting an objective and independent process that will help determine the parameters to take it away from the realm of argument. Countries like Ghana and Chile did same and it working for them. I believe it will also work here,” she said.
On the high share of 74 per cent expenditure in the budget, the Minister said that recurrent expenditures in the budget were of great concern to the government, as they reduced the size of funds available for investments in capital projects.
“This has been our view from the first day that we came into this job. We have not yet been able to make the choices needed to change the structure of the budget.
“The high ratio of recurrent expenditure now, after a reduction to about 65 per cent made some years back, arose because of the awards to salaries that were given in 2010.