Nigeria’s slow domestic economic growth will be corrected by investment and government spending


Tuesday, February 08, 2022/ 1:15 p.m. / by Ottoabasi Abasiekong for WebTV / Header image credit: NGX

A combination of increased investment and government spending will drive domestic economic growth in Nigeria in 2022. Mr. Ben Akabueze, Director General of the Federal Budget Office (FBO), said during a recent NGX Market Recap 2021 and a webinar on the outlook for 2022.

Akabueze said the government has maintained an expansive fiscal stance over the years. In 2021, the government launched the National Development Plan 2021-2025, which aimed to increase investments by N349 billion, with the private sector to contribute N300 billion.

The budget boss said significant private investment is needed to improve infrastructure. The government had embarked on policies such as the Road infrastructure tax credit scheme encourage investment in road construction.

The DG informed the stakeholders that the government was open to public-private partnership (PPP) transactions, with airports under concession.

“Nigeria has a deliberate strategy focused on non-oil revenue growth, and we are on a good trajectory in this regard: in 2015, oil revenue accounted for 58% of projected FGN revenue, compared to a projected 35 % for 2022. In 2021, most non-oil fiscal revenue was above target Oil sector let government down with oil revenue 50% below target despite significantly higher oil prices than the budget benchmark. The shortfall was largely due to the effects of unbudgeted fuel subsidies and oil production below our OPEC quota,” Akabueze added.

Speaking further on public spending, he noted that cutting back is not a viable option for several reasons; First, Nigerians are not spending enough per capita. Therefore, what is needed, on the expenditure side, is to focus on the effectiveness of expenditure.

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