Finance Minister, Mrs. Kemi Adeosun, who briefed the Senate on the state of the economy was blunt. She told the lawmakers yesterday that the country’s economy has entered a recession stage. But her Budget and National Planning counterpart, Udoma Udo Udoma, tried to keep hope alive, saying a recession is still far away.
She, however, asserted that the recession would be a very short one because government was taking a lot of measures to reverse the negative economic trend. Adeosun also disclosed that a total of N247.9 billion has been released to fund key infrastructural projects.
She said: “Is Nigeria in recession? Technically, if you go into two quarters of negative growth, 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. 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 would ensure that we don’t go below where we need to go. I think with what we are doing, we would begin to turn the corner, I believe, by the third quarter.
“We are not the only country in recession, many countries are doing far worse than us. But what Nigerians want to know is: ‘How’s that going to affect me’: and I want to assure everybody that what we are doing is going to work and it’s going to turn this economy around.” she added.
The minister further insisted that despite the economic ailments, Nigeria’s economy remained the biggest in Africa.Of the N247. 9 billion, Adeosun said N107 billion was for projects in the Works and Housing sector, while the Agriculture sector got N29.1 billion. She said another N60 billion would be released in the next few weeks.
Giving more details of the releases so far, Adeosun said: “Ministry of Works had received N74 billion 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 N21.9billion compared to just N4 billion for the whole of last year and Ministry of Transport has received N22 billion compared to just N6billion last year.
I believe the speed and extent of our releases show government’s intent and seriousness around reviving this economy. We are very confident that the work that we are doing will bear fruits. We are already beginning to see increased production in our agriculture.
In another development, former President Olusegun Obasanjo and former Chief Economist of the World Bank, Prof. Joseph Stiglitz, yesterday said most economic policies handed over to Nigeria and other African countries by global financial institutions caused part of the development woes in the country and continent.
And as if in agreement, Adeosun said: “I am not too worried about the International Monetary Fund(IMF) projection because one of their functions is global economic surveillance. 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 about what we are doing and where we are going. I remain extremely confident about Nigeria.”
On what was inherited from the past administration in terms of finances, Adeosun said: “I inherited very little by way of reserves. I inherited significant debt, contractor debt, cash calls of $5 billion dollars outstanding to oil companies. We have paid contractors N107 billion but they still find it very difficult to work because they are owed and some of them have not been paid since 2012.
Their claims are over N390 billion. So, I inherited reserves 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.” The minister also explained that the loans government has taken so far to fund the budget have been more of local loans.“We have been borrowing largely from the domestic market because we need to get the exchange rate sorted out to enable us borrow from the international market.”
While briefing State House correspondent at the end of the National Economic Council (NEC) meeting presided over by Vice President, Yemi Osinbajo, Udoma admitted that all signals to the fact that the country might not be able to measure up to the criteria that would comfortably push its economy.
He dispelled suggestions that the government might not, as a fall out of the current dwindling finances , be able to meet its obligations to its workers, noting that the government would continue to pay workers salaries .
However, Udoma, said the National Bureau of Statistics (NBS) would be giving the government all the figures adding: “If as we suspect the second quarter is also negative, then of course technically you could say that we are in recession. But even if we are not, the situation in the economy right now is one that of course we are addressing.”
Speaking at the yearly general meeting of Africa Export-Import Bank in Mahe Island, Seychelles, Obasanjo who said he remains a realist, noted that the World Bank gave Nigeria the import substitution policy and the structural adjustment policy, but when it failed, they blamed the implementation instead of accepting the misdirection.
The former president, who lamented the reversal of gains and achievements of his administration, few years after he left office, said that his economic policies revved up cocoa production from 150,000 tonnes to 400,000; cassava, from 30 million metric tonnes to 50 million metric tonnes and privatization of shipping and railways that were ridden with corruption and maladministration as well as promoting cement export through Dangote Group, among others.
On his part, Stiglitz said the policies and advice handed down to Africa by the International Monetary Fund led to its industrialization challenges.
He said that he had kicked against the policy, not because it was entirely wrong, but that it lacked distinction of economic opportunities between developed and less developed countries, with assumption that everyone would come out better.
According to him, it is gratifying now that the policy promoters are realizing his earlier warning and seeking counter policies to amend the consequences.
One of such policies from the IMF, he said, was the discouragement of the establishment of development financing institutions by countries and regions, but noted that it is now championing such initiatives, with two being launched in Asia last year.
He said to counter the entrenched challenges of those policies, emerging economies, characterized mainly by commodities’ trading, must invest in education and industrialization with value addition to their products’ offering as target
Source : http://m.guardian.ng/news/nigeria-in-recession-says-adeosun-udoma-disagrees/
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