By Emmanuel Elebeke
The Federal Government has disclosed why Capital Expenditure, CAPEX does not rise at the same pace with revenue, stressing that most of the expenditures are multi years project and when deployed to revenues it does not come in one accounting year.
The Minister of Finance Budget and National Planning, Zainab Ahmed, who stated this, added that that Nigeria’s debt instruments have remained attractive to both local and international investors because the country does not default in repayment.
Addressing the press at the end of the just concluded #NES27, Nigerian Economic Summit Group, the Minister explained why capital why capital expenditures does not rise at the same pace with revenue, saying : ‘‘the nature of capital expenditure is because most of them are multi-years projects, even when you deploy revenues, they do not come in one year. It comes in the business productivity and taxes.’’
She said: ‘‘We are indeed concerned about paying back loans, if you look at the records, you will find out that Nigeria has been consistent in paying both local and foreign loans and that is why whenever we go to the market, they receive us well because we have been faithful in our repayment.
‘‘We do not just put numbers and borrow, this is a work that was done to determine what is required in terms of expenditure and what we expect to generate in terms of revenue and the gap that is not financed by other financing items is debt.
‘‘And then we have a debt management strategy that guides how we borrow. So, borrowing is carefully calibrated to meet the debt service obligations when they fall due.
On how impactful, she said, ‘‘If you see the kind of infrastructure that is being deployed you will see it physically. When you build a road and the travel time of traveler reduces, that is time saved and money in the pockets of people. It is also evident in the quality of roads where you have less accident and those are lives saved. So, there are so many impacts that you cannot count them in terms of monetarily terms but in terms of improving quality of peoples’ lives and easy of doing business.
On the issue of investment not getting to the right people, Ahmed said, ‘‘President believe that we must be accountable and transparent for our actions and also if you see what is happening, people are actually being held responsible for actions they took that are not supposed to be taken. Now, people know there are consequences for their action. However, I also believe there should be a reward system.’’