Government funds critical projects from excess crude account

The determination to realise the Vision 20-2020, is the motivation for the three tiers of government to draw $5.34 billion (about N794 billion - at N148.61 to the dollar) from the excess crude revenue account.

The Umaru Yar'Adua's administration has initiated a number of projects under its seven-point agenda to help develop the Nigerian economy into one of the world's biggest economies by year 2020. The projects are those critical to the development of the energy, education and transportation sectors as well as the promotion of security, wealth creation, land reform and peace in the Niger Delta region.

Some people have, however, picked holes on the spate at which the tiers of government are drawing from the excess crude account, which was created by the government to save for the "rainy day" the excess revenue realised from the sale of crude oil at prices above the benchmark price for the year's budget.

Money for power

But, the Minister of State for Finance, Remi Babalola, at the weekend justified government's action, saying it is to facilitate the attainment of the nation's Vision 20:2020 objectives.

"What government has done is that the three tiers of government agreed to take $5.34 billion from the excess crude and invest in the development of the Independent Power Plants (IPPs) in the power sector as well as ensure an efficient and effective power transmission and distribution system," Mr. Babalola explained.

"This will ensure that at any point in time we will be able to generate, transmit and distribute power to the people."

Noting the multiplier effect of the investment on the economy, the minister said the withdrawal of about $5.34 billion is equal to the total capital expenditure for last year on the sector, adding that there is an additional expenditure on agriculture for the construction of silos in the country.

"Over N400 billion has been pushed into agriculture sector by the government in order to support that sector. These are part of the government's efforts to stimulate production and demand."

Financial sector is crucial

Mr. Babalola said with a target of positioning Nigeria among the top-20 largest economies by the year 2020, the role of the nation's financial system, - made up of the banking, insurance, pension and the capital market sub-sectors - towards its realisation is very important, arguing that no nation can meet its set targets without its support.

"We need a virile financial system in the country to attain our national objectives. This has necessitated the ongoing reforms in the financial sector. For us as a nation, a strong and virile financial sector is sacrosanct," he disclosed.

The minister explained that current investments in infrastructural development, particularly on power, roads and agriculture, are aimed at supporting the expected growth in the economy, adding that the nation's economy is also being diversified from oil to non-oil to enable it recover from global shocks.