Udoma: FG Working to Reduce High Interest Rate

Insists 7% growth target in ERGP achievable

The Minister of Budget and National Planning, Udoma Udo Udoma, yesterday said the federal government is currently working with the Central Bank of Nigeria (CBN) to reduce the high interest rate across the board.

Before now, some targeted sectors of the economy including agriculture and manufacturing had been given preference in rates through CBN interventions which aimed to cushion the harsh impact of the current fiscal and economic crisis as well as boost the sectors amid the recession.

But speaking on Arise Television, a sister broadcast arm of THISDAY Newspapers on the newly released Economic Recovery and Growth Plan (ERGP) of the Federal Government, Udoma said government is also trying to improve the working relationship between the fiscal and monetary authorities.

He said government is committed to having an exchange rate regime that’s market determined and with fewer administrative controls partly as a way of restoring investor-confidence in the economy.

He said: ”It’s a process. The Central Bank of Nigeria is working on it and we’ll want to get there as quickly as possible because that’s a major issue everybody has raised.

“We need to address the issue of supply of foreign exchange and that’s what we are working on right now.”

He added: ”We are trying to bring things closer. We are working with the CBN and fiscal authorities to bring interest rate down across the board.”

The minister, however, noted that the implementation of the new recovery plan will be taken seriously by government to ensure it doesn’t go down the drain like previous policies.

He said: ”My ministry will coordinate but importantly, a delivery unit is going to be set up in presidency and it’ll come with a presidential fiat and that’ll monitor and ensure delivery and would have reports every three months.

“All MDAs would have to account: they have targets to meet and they must meet those targets.”

Udoma also said he believed the seven percent growth target contained in the ERGP though ambitious, was achievable despite a gloomy economic data in recent times.

According to him: ”It’s not unrealistic, it’s ambitious but we can do it. Oil prices crashed and production crashed. Oil prices are moving up a bit, we are restoring production on the one hand.

“But more importantly, we want to diversify our sources of revenue.

We want to export other things other than crude oil. So, we are looking at the various things we can export: rice, cassava, soya beans... we are looking at petrochemicals. There’s just so much we can do in this country.”

On the high unemployment rate which had been a major concern to Nigerians, the minister said government intended to create at least 15 million new jobs which are targeted at youth empowerment in various areas within the next four years.

Specifically, he said there will be massive job opportunities in construction sector of the economy where significant activities will take place in roads, bridges and railways construction.

He added that government was setting up a social housing fund of N1 trillion which government stake will be N100 billion- with massive job opportunities expected as a result.

He said: ”We’re putting a lot of investment into agriculture, rural roads and fertiliser and so on, that’ll create jobs.

“We are setting up special economic zones for manufacturing in different parts of the country.

“These zones will have uninterrupted power, water, security and these will create a lot of new jobs. Most of the new jobs will be created in the private sector by the private sector.”

Asked by the programme anchor if the new economic recovery blueprint can boost electricity, Udoma said: ”We’ve come in to fix problems and that’s one problem we are determined fix.

The first, of course, is to address the issues of power generation -the feed stock.”

He said: ”We’ve had shortages in gas because of sabotage and all that but part of the vice president’s mission to Niger Delta is to address those issues.

To get gas supply back and that’s been a major constraint and so we are working on that.

“Then, it is important that there’s liquidity in the whole system itself: every part of the system: the gencos, discos and transmission, every aspect is profitable.

“So we are working on that and we’re putting government support behind it.

We’re strengthening the transmission, we’re putting more resources in transmission and government is even involved in generation.”

He said: ”In the 2017 budget, there’s a provision for some funding for Mambilla Hydroelectric.We are engaging with the private sector and putting government resources behind that. Apart from the issues I have raised, we also want to diversify our sources of power and so we are looking at solar, and right now, we are looking at some solar projects that will come on stream.

“We’re looking at wind as well. We’re looking at using coal as well. We’re not going to rely on gas alone, we’re going to look at diversifying our sources.

It’s not a futuristic thing. These are things we are working on as I speak.”

He also said the growth plan was not predicated on oil price movement but a well crafted diversification strategy.