Daily Trust economists: How FG can sustain economic growth
The Daily Trust Board of Economists has commended the effort by the federal government in ensuring that the economy exit recession in the second quarter of 2017, but urged for caution in sustaining and managing fragile growth.
In a communiqué at the end of its 3rd quarters meeting held over the weekend in Abuja, signed by the Board Chairman, Professor Ode Ojowu, the board urged the federal government to accelerate the implementation of the Economic Recovery and Growth Plan (ERGP) so as to align with the 2018 Budget.
“For effectiveness of delivery, we expect that the draft budget for 2018 should be submitted to the National Assembly by October 2017 as indicated by the Federal Government.”
The Board said it is optimistic about the turnaround of economic growth from recession to positive territory, but noted that this growth could possibly have been higher but for the uncertainty that has discouraged further investments.
The Board advised that every effort must be made to calm the current situations in order to encourage investments in the various sectors of the economy.
“We note the factors that have contributed to economy recovery, namely the Agricultural sector, relative stability in crude oil output and price, as a result of domestic initiatives and external (OPEC) interventions. Also we note the positive impact of the release of the 2016 Capital Budget. Looking forward, we urge that Monetary Policy Rate (MPR) be held steady, because it has promoted predictability.”
On the national debt, the Board advised government that all borrowings must be tied to projects that are selfliquidating. “Against the current concern about over-borrowing by the government, we hereby re-emphasise the need to ensure frugality, value-formoney and a clear strategy so as to minimize the adverse effect on future generations.”
On the economic diversification, the Board noted the strenuous efforts of the government to diversify the economy. “However it is worth repeating that sustainable diversification must be centred on transforming/processing primary products into value-added products. The economic turnaround/ recovery so far being witnessed still shows low-level value-addition as measured by manufacturing sector contribution to GDP.”
“To achieve diversification, certain co-operant factors like electricity supply, water (both for industrial and irrigation uses), and improvement in land transport for scale evacuation and additional improvement in technology for storage and reduction of post-harvest losses are emphasized. The Board notes the crisis in the electricity value-chain in particular the relationship between the GENCOs and DISCOs. The issues of ownership and the legislation surrounding them must be tackled. Doing nothing to resolve the crisis will jeopardise economic recovery and growth.”
The Board also commended the Federal Government for the award of contract for execution of the Mambilla Hydroelectricity project. “The Federal Government must ensure time-bound execution of the project so that on completion it will contribute greatly to non-oil sector growth.
Other issues discussed at the meeting the restructuring, the upcoming 2018 census, as well as the 2019 elections, all bunching together in a period of great uncertainty.”