from OKORO CHINEDU in Lagos, Nigeria
LAGOS – FIRST Bank of Nigeria (FBN) has commended moves by government to choose an expansionary stance in the wake of softening commodity prices and waning investments from China to the continent.
Nigeria opted for that stance as other African governments adopted fiscal austerity. Among these are Angola, Kenya, Ghana and Zambia who are projected to face economic challenges as a result.
“We support the decision on domestic and more general grounds but caution that its impact is finite,” FBN stated on Thursday.
“The stance is warranted in view of Nigeria’s colossal infrastructural deficit.”
The bank said estimates of the cost of making good the deficit abound.
“To give two official examples, we cite US$10 billion per year for 10 years for the power sector, and $16 billion for transport over five
The expansionary stance is also justified because it was an election pledge by the All Progressives Congress (APC), FBN added.
“It has a social dimension. In this context, the budget and national planning ministry said this week that the 2017 budget will include N500
billion for social intervention, and so repeat this year’s allocation,” said the bank.
FBN maintained support of the stance because the government has spare borrowing capacity.
“We have previously noted that market conditions now favour Eurobond issuance by emerging and frontier market borrowers.”
– CAJ News / APA