Nigeria is Technically in Recession - Finance Minister

Reality has set in for Nigeria’s economic managers after living in self-denial about the country’s economic situation for a while.

While experts have continually raised an alarm on Nigeria’s gradual economic downfall, government officials consistently insisted that the nation’s economy was strong and buoyant even when all economic indices revealed otherwise. But the chicken has come home to roost and the hitherto prophets of gloom are now prophets of doom. 

The Central Bank of Nigeria (CBN) governor, Godwin Emefiele set the ball rolling yesterday, July 20 during a presentation to the Nigerian Senate. A seemingly sober Emefiele told the senators that the country’s economy has been characterised by external shocks, sharp decline in commodity prices and geo-political tensions along important global trading routes among others. 

It was the turn of his boss today, July 21. Apparently tired of the bare-faced lies she has been spewing in the last few months, minister of finance Kemi Adeosun finally agreed that the nation was in trouble.

Mrs. Adeosun made efforts to allay public fears about the implication of the country’s troubled economy, saying “things are tough”, but there should be no panic.
“Things are tough, but we are not ignorant, I want to assure Nigerians the economy is in good hands and we are absolutely doing our best. We want to assure Nigeria we are on the right path, we are on the right track.”

Mrs. Adeosun’s assurance came four days after the National Bureau of Statistics said the Consumer Price Index used in measuring inflation in the country hit 16.5 percent, the highest in 11 years.

It also came after the International Monetary Fund said Nigeria’s economy was projected to contract in 2016. It cut the country’s GDP growth forecast from 2.3 percent in April to – 1.8 percent, lowest in 29 years.

But Mrs. Adeosun brushed aside the grim predictions by the IMF projections.
“We should not be worried about IMF. We should be confident about what we are doing,” she said. “Technically, Nigeria is in recession but we should not go into definition; but what we are doing.”

To revive the economy, she said, the government had devised strategic measures, chief of which is discipline regarding how public money is spent.
She said by “cleaning” spending, cost of salaries had been reduced from N165 billion to N159 billion, and that capital-recurrent expenditure ratio had been restructured to 30:70 “compared to previously when recurrent expenditure was 90 per cent and capital expenditure 10 per cent”.

“We are declaring war on wastes,” she said, disclosing the government had stopped funding nonessential items.

“The objective is to release money for capital expenditure to get the economy going.”
She gave the total amount released for capital expenditure since the signing of the 2016 Appropriations Act to be N247 billion.

Of that figure, Ministry of Power, Works and Housing received 107 billion.

She said the government was also making efforts to attract investment.

Quizzed about the low delivery despite huge releases for capital expenditure, Mrs. Adeosun said the Buhari Administration inherited huge contractors’ arrears.
Nigeria could no longer continue to rely on oil.

She rejected claims by a senator from Ekiti State, Abiodun Olujimi, who lamented the failure of “27 states” to pay workers, saying it was not so under PDP.
Adeosun said the current challenges were cumulative consequences of the choices made by the last PDP government.

According to her, states, for two years, were borrowing to pay salaries.
She said the Fiscal Sustainability Plan agreement reached between the Federal Government was meant to improve internal revenue drive, cut waste and be transparent.

On the contentious issue of constituency projects, she assured the Senators that the Executive had no agenda not to implement them, being parts of the Appropriations Act.
“Constituency projects are what legislators have put in place knowing specific difficulties in their communities,” she said.