Finance Minister Admits Nigerian Economy In Recession

The Federal Government of Nigeria has admitted that Nigeria’s economy is in recession after all. Minister of Finance, Mrs Kemi Adeosun yesterday formerly confirmed this even as she added that federal government had since adopted some strategies and policies to address the problems. Adeosun, who stated this while briefing the Senate, however, assured that there was no cause for panic, describing the recession as a mere technical one.

She said: “Technically, our economy for now is in recession because if you go into two quotas of negative growth, your economy can be said to be in recession. Thus, technically, we are in recession but I don’t think we should dwell on the definition; I think we should really dwell on where we are going. “I think if we are in recession 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 will ensure that we don’t go below where we need to go; and I think with what we are doing right now, we will begin to turn things around.” However, when reminded at the session that the International Monetary Fund, IMF, in its latest reports predicted that the Nigerian economy would continue to shrink till the end of the year, the minister said the reports should be disregarded as such projections had not always been accurate. “I am not too worried about the IMF projection because their projections have not always been accurate. 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 remain extremely confident as I said around Nigeria,” she said. Adeosun further explained that in getting things turned around faster, government in its implementation of the 2016 budget had been very strategic in spending by investing in infrastructure, a move she said had made government release a total of N247.9billion for capital projects execution in the 2016 budget. According to her, out of the N247.9billion released so far from the N1.1trillion capital votes in the budget, N74billion went for infrastructural development as against N19billion released to the sector for the whole of last year while N21.6billion and N22billion were released and cash backed for execution of capital projects in the agriculture and transport sectors respectively. She added that the federal government in few weeks time would make additional release of N60billion for capital projects execution. The minister in response to question on financial status of the country inherited from immediate past administration, said the present government inherited little reserves but huge debts, one of which was the $5billion cash calls indebtedness. She said: “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 significant debt, contractor debt, cash calls of $5 billion dollars outstanding to the oil companies. “Many of the contractors even though we have paid them N107 billion find it very difficult to work because they are owed and some of them have not being paid since 2012. Their claims are over N390 billion. “So, I didn’t inherit reserves that are positive, I inherited reserves that tend to be more negative than positive because the economy is actually in very good hands and we are doing absolutely our best to get through this difficult period. “We are doing everything possible to avert and to manage the situation which we didn’t create, unfortunately, but which we inherited and we as a nation we must all get out of.” She in her presentation appealed to Nigerians to patronise locally made goods as against imported ones as a way of strengthening the naira and revamping the economy. The minister also assured the lawmakers that federal government was seriously putting measures in place to diversify the nation’s economy in view of the dwindling revenues accruing from crude oil sales, aside decline in its production level as against increase in population. “Government is seriously moving towards diversification of the economy more so, since the mono product template can no longer sustain the survival of the country economically. “While Nigeria with her 170 million estimated population, produces 2.2million barrel per litre of crude oil per day, Kuwait with a far less population of 1.4million people , produces 2.9mbp and not talk of Saudi Arabia populated by an estimated 30million people, producing 9.7million barrels per day,” she explained. FG, states, LGs share N559.032bn In what appeared to be an improvement in federal allocations to the various tiers of government, the Federation Accounts Allocation Committee, FAAC, last night announced that the federal, states and local governments would share N559.032 billion for the month of June. The amount represents a marginal increase compared to that of the previous month. The amount shared among the Federal, States and local governments is N129. 198 billion higher than the N305. 128 billion distributed in the month of May. The obviously elated minister of finance, Mrs. Kemi Adeosun attributed the enhanced revenue generation to the the federation account to improvement in collection from non oil revenue by the Federal Inland Revenue Service, FIRS, and the Nigerian Customs Service. The excess crude account, according to the Minister now stands at $3. 094 billion as at July 20, 2016. A breakdown of the money shared among the three tiers of governments shows that the gross statutory revenue of N538. 788 billion received for the month of June was higher than the N237. 466 billion received in the previous month by N301. 322 billion. Crude oil export volume increased by 1.9 million barrels in March 2016, despite the subsisting Force Majeure declared at Forcados Terminal.