Econ­omy: Things will get bet­ter – FG

Daily Trust - - FRONT PAGE - By Isi­aka Wak­ili & Is­mail Mu­dashir

The Fed­eral Gov­ern­ment has said Nige­ria’s trou­bled econ­omy will be­gin to pick up in the 3rd quar­ter of the year.

Min­is­ter of Fi­nance Mrs. Kemi Adeo­sun and that of Bud­get and Na­tional Plan­ning Udoma Udo Udoma stated this at sep­a­rate events in Abuja yes­ter­day.

They ad­mit­ted the coun­try “is tech­ni­cally in eco­nomic re­ces­sion” but were up­beat it would be “a short one.”

Brief­ing sen­a­tors on the state of the coun­try's econ­omy, the fi­nance min­is­ter said: “Tech­ni­cally, we are in re­ces­sion but I don’t think we should dwell on def­i­ni­tions I think we should re­ally dwell on where we are go­ing.

“...What I will like to say is we are go­ing to come out of it and it would be a very short one be­cause the poli­cies that we have would en­sure that we don't go be­low where we need to go and I think with what we are do­ing we would be­gin to turn the cor­ner I be­lieve by third quar­ter," she said.

Mea­sures be­ing put in place to re­vive the econ­omy, she said, in­cluded

pru­dent man­age­ment of re­sources, in­creas­ing cap­i­tal spend­ing from 10 to 30 per­cent, declar­ing war on wastages, not fund­ing nonessen­tial items, re­duc­ing the wage bill and di­ver­si­fy­ing the econ­omy.

Speak­ing on the pre­dic­tion of the In­ter­na­tional Mone­tary Fund (IMF) which slashed Nige­ria’s GDP growth fore­cast from 2.3 per­cent in April to – 1.8 per­cent, the min­is­ter urged Nige­ri­ans to be con­fi­dent in the mea­sures be­ing taken by the gov­ern­ment.

“I am not too wor­ried about the IMF pro­jec­tion ... they equally is­sued a neg­a­tive re­port on Bri­tain as a re­sult of Brexit. I don’t think we should panic every time IMF speaks. I think we need to be con­fi­dent around what we are do­ing and where we are go­ing.

“I re­mained ex­tremely con­fi­dent as I said around Nige­ria ... Agri­cul­ture out­put seems to be go­ing up.

“If you look at what is hap­pen­ing in the pe­tro­leum sec­tor be­fore sub­sidy we are sub­si­dis­ing around 45 mil­lion dol­lars litres of fuel a day. Now with­out sub­sidy us­age has dropped to 26 mil­lion litres. So, what does that tells you? All the smug­gling that was go­ing out of the coun­try based on the sub­sidy that we are pro­vid­ing have stopped. Those are real savings to the econ­omy which we are now redi­rect­ing into the es­sen­tially in­fra­struc­ture that will get this econ­omy go­ing,”she said.

Asked to be spe­cific on pe­tro­leum sub­sidy, she said, “I can con­firm that there is no more sub­sidy”.

She pro­jected that the fed­eral gov­ern­ment would record over 60 per­cent in the im­ple­men­ta­tion of 2016 bud­get.

She said N247.9 bil­lion has been re­leased for cap­i­tal pro­jects and that N60 bil­lion more would soon be re­leased.

“Min­istry of Works had re­ceived N74bn in the last two months com­pared to N19bn re­ceived for the whole of last year. Agri­cul­ture which is a strate­gic fo­cus of this gov­ern­ment has re­ceived N21.9bn com­pared to just N4bn for the whole of last year. And trans­port has re­ceived N22bn com­pared to just N6bn for the whole of last year, “she said.

Re­spond­ing to ques­tion on what was in­her­ited from the ad­min­is­tra­tion of Good­luck Ebele Jonathan, she said they in­her­ited cash calls of $5 bil­lion out­stand­ing to oil com­pa­nies and N390 bil­lion lo­cal con­trac­tors’ debt.

“I think at a time like this blam­ing who was re­spon­si­ble doesn’t ac­tu­ally take us any­where but I will tell you what I in­her­ited. I in­her­ited very lit­tle by way of re­serves, I in­her­ited cash calls of $5 bil­lion out­stand­ing to the oil com­pa­nies,” she said.

She said they have paid N107 bil­lion out of the N390 bil­lion lo­cal con­trac­tors debt in­her­ited from Jonathan’s ad­min­is­tra­tion.

On fer­til­izer, she said they in­her­ited N65 bil­lion debt on fer­til­izer and that they have paid N20bn.

She said the fail­ure of the pre­vi­ous ad­min­is­tra­tion to pay fer­til­izer con­trac­tors in 2014 neg­a­tively af­fected sup­ply of the com­mod­ity and food pro­duc­tion in the coun­try. She was op­ti­mistic that the coun­try would record bumper har­vest this year.

‘Pri­vate sec­tor has role to play’

On his part, Udoma said the gov­ern­ment was ex­pect­ing that by the third-quar­ter of the year, the econ­omy would start to pick up and “fin­ish the year in a pos­i­tive ter­ri­tory.”

The min­is­ter was field­ing ques­tions from State House cor­re­spon­dents af­ter the Na­tional Eco­nomic Coun­cil (NEC) meet­ing presided over by Vice Pres­i­dent Yemi Os­in­bajo.

“We ex­pect to be marginally pos­i­tive by the end of this year. But by next year, we will now start to pick up, and we will have much more growth next year,” he said.

He said the gov­ern­ment was fo­cus­ing on non-oil - agri­cul­ture solid min­er­als and man­u­fac­tur­ing, ex­plain­ing that the cur­rent sit­u­a­tion was an op­por­tu­nity “to fi­nally move away from to­tal de­pen­dence on the sin­gle com­mod­ity, crude oil.”

Asked to con­firm if the coun­try was in re­ces­sion, Udoma re­sponded: “Re­ces­sion is ba­si­cally when you have two quar­ters of neg­a­tive growth. We had a first quar­ter of neg­a­tive growth, and we’re still wait­ing to get all the fig­ures for the sec­ond quar­ter which has just ended in June. The Na­tional Bureau of Statis­tics will be giv­ing us all the fig­ures.

“But if as we sus­pect the sec­ond quar­ter is also neg­a­tive, then of course, tech­ni­cally you could say that we’re in re­ces­sion if those fig­ures turn out to be so. But even if we are not, the sit­u­a­tion in the econ­omy right now is one that of course we are ad­dress­ing.

“Some of it was ex­pected, some of it was not. We did ex­pect the low oil price, but we did not ex­pect the level of dis­rup­tion that we got in the Niger Delta such that oil pro­duc­tion went down, and we’re not likely to achieve the 2.2 mil­lion bar­rel per day be­cause it went down to 1.2 mil­lion bar­rel per day; a lit­tle over about 1.3 mil­lion bar­rel per day.

It had also af­fected power sup­ply be­cause a lot of power was fired by gas.

He said the gov­ern­ment ex­pects the pri­vate sec­tor to play a key role in turn­ing around the econ­omy, adding that the role of the fed­eral gov­ern­ment is to pro­vide the en­abling en­vi­ron­ment.

‘We’ll ex­plore new ideas in gas, agric’

Also yes­ter­day, Pres­i­dent Muham­madu Buhari said his gov­ern­ment would con­tinue to wel­come in­no­va­tive ideas in the gas, tech­nol­ogy and agri­cul­tural sec­tors to re-po­si­tion the econ­omy.

His spokesper­son Femi Adesina in a state­ment quoted him as say­ing this at the State House in Abuja yes­ter­day while re­ceiv­ing the let­ter of cre­dence of the High Com­mis­sioner of the Repub­lic of In­dia, Mr. Nagab­hushana Reddy.

Pres­i­dent Buhari said Nige­ria would also strengthen co­op­er­a­tion with the Asian coun­try on ed­u­ca­tion, tech­nol­ogy trans­fer and mil­i­tary train­ing, agri­cul­ture and trade.

Reddy had ear­lier said the In­dian gov­ern­ment was look­ing for­ward to con­sol­i­dat­ing its re­la­tion­ship with the min­istries of pe­tro­leum, agri­cul­ture, trade and in­vest­ment, and power, hous­ing and ur­ban de­vel­op­ment for var­i­ous pro­jects.

The state­ment said Buhari also re­ceived let­ters of cre­dence from am­bas­sadors of Gam­bia, Sri Lanka and Iran, Fa­mara Kassy Gaye, Tham­bi­ra­jah Reveen­thi­ran and Morteza Rahimi Zarchi re­spec­tively.

Photo: NAN

From left: Min­is­ter of State for Bud­get and Na­tional Plan­ning, Mrs Zainab Ahmed; Min­is­ter of Bud­get and Na­tional Plan­ning, Sen. Udoma Udo Udoma; and Vice Pres­i­dent Yemi Os­in­bajo at the Na­tional Eco­nomic Coun­cil meet­ing in Abuja yes­ter­day

Min­is­ter of Fi­nance, Kemi Adeo­sun

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