The federal government is about concluding negotiations with China Exim Bank on the financing of some rail projects in the country, including the Katsina-Kano-Maradi line and the Ibadan-Kano rail line, among others.
However, a World Bank economist has raised the alarm that most African countries are in trouble because many debts were contracted in a non-transparent way, stressing that countries needed to strengthen capacity to manage the increasingly risky debt more transparently.
Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said yesterday during the virtual opening ceremony of Nigeria Finance Online, co-hosted with the Nigerian Investment Promotion Commission (NIPC), that the projects were part of President Muhammadu Buhari's plan to boost infrastructural development.
The federal government had said recently that it earmarked N12.6 trillion for the construction of four standard gauge rail lines in different parts of the country in 2021, including the Kano-Katsina-Maradi border rail line.
Minister of Transportation, Hon. Rotimi Amaechi, said the projects, to be financed through budgetary and counterpart funding, were aimed at achieving intermodal transportation nationwide.
He listed the projects to include the construction of the 378km single-track standard gauge rail line traversing Kano-Katsina-Jibiya with a 20km extension to the commercial border town of Maradi in the Niger Republic and a branch line, Kano-Dutse, adding that they will be funded through foreign loans already being negotiated by Ahmed.
But speaking on the projects, Ahmed stated that aside from the $2.4 billion infrastructure company that has just been floated by the federal government, the rail projects, which will be executed by the China Civil Engineering Construction Corporation (CCECC), will expand the economy and lift Nigerians out of poverty.
She said: "With respect to infrastructural development, there are several projects being executed within the country as we speak. We are currently at the final stage of negotiations with China Exim Bank for the financing of the Ibadan-Kano section of the Lagos rail line, which will significantly boost trade across Nigeria and in the continent of Africa.
"We are also at the final stage of negotiations of financing for another rail line for not just the Ibadan-Kano one but also the Lagos-Kano rail line which will significantly boost activities and an additional rail line that will pass through Katsina-Kano, going up to Maradi in Niger Republic to open up trade relations with our neighbours.
"Furthermore, the president recently approved the creation of a $2.4 billion infrastructure company which will accelerate the development of infrastructure in the country."
Ahmed expressed pleasure that the Nigerian economy exited recession in the last quarter of 2020 with a Gross Domestic Product (GDP) growth of 0.11 per cent, after two consecutive sessions brought about by COVID-19.
She added that it is an indication that the policies and programmes that Buhari and his team put together are achieving the desired results.
She expressed the federal government's commitment to ensuring that the economy continues on the current growth trajectory through the execution of various reform policies and strategies designed to stimulate and sustain its recovery.
She identified one of such policies as the Nigerian Economic Sustainability Plan (NESP), developed as a strategic response to COVID-19 challenges.
According to her, the policy contributed to the recovery of the economy through the creation and deployment of financial stimulus package, provision of support for Micro, Small and Medium Enterprises and the creation of jobs.
The minister said the medium-term expenditure framework, the annual budget and more recently the Finance Act of 2020 had been deployed to support the economy in 2021.
She stated that for instance, the Finance Act of 2020 introduced over 80 amendments to 14 different laws, which are focused on fiscal incentives to stimulate the business and economic recovery and growth, stressing that the new law does not impose any new taxes.
Ahmed stated that Nigeria remains Africa's largest economy and also its choice destination on the continent for investors and development partners, adding that the federal government is working to fix the infrastructure gap and enhance the ease of doing business for investors.
In his comments, the World Bank Chief Economist, Africa, Dr. Albert Zeufack, said the taxation of land and property as a way of broadening the tax base instead of solely focusing on demand taxes like Value Added Taxes (VAT) or expanding the net to the informal sector, should be encouraged.
He added that most African countries are in trouble because many debts were contracted in a non-transparent way.
He stated that countries needed to strengthen their capacity to manage the increasingly risky debt more transparently.
"For countries like Nigeria which are rich in extractives, managing commodity resource revenue more transparently is very key. We need to improve transparency, stem illicit financial flows and tax evasion. It's not just about what debt can do.
"There are a number of policy reforms that can be done. On the expenditure side, there's a need to reprioritise and I am sure the government may be doing that. We need to improve efficiency, public investment management in a way to select those that have high returns," he said.
Zeufack called for the strengthening of institutions and investment in people to accelerate Africa's economic recovery, saying that in Sub-Saharan Africa, digital infrastructure is still weak.
Also speaking, the Director of Monetary Policy, Central Bank of Nigeria (CBN), Dr Hassan Mahmud, stated that to achieve growth, the bank was working to get a stable exchange rate, interest rates and others.
He explained that although the exchange rate was outside the control of the CBN, tools were being deployed to manage price and monetary stability.
Mahmud stated that the bank was aware that inflation could wipe out the incomes of Nigerians, adding that inflation numbers are critical to the CBN's monetary policy mandate.