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The Minister of Finance, Mrs. Kemi Adeosun, has con firmed that the Nigerian economy has gone into recession.
The minister, while appearing before the Senate yesterday, also said
that the Muhammadu Buhari administration inherited negative reserve from
the immediate past administration, alleging that the Peoples Democratic
Party (PDP) government owed contractors N390 billion, while outstanding
cash call debt was $5 billion.
This was as the President of the Senate, Bukola Saraki, lamented the
lack of synergy between the executive and the legislative arms of
government in governance in the present administration. Adeosun made the
confirmation yesterday while appearing before the Senate in plenary, to
brief the chamber on the state of the economy, with respect to the
monetary and fiscal policies adopted by the Federal Government to
salvage the current economic situation in the country.
The Senate had invited Adeosun and the Governor of the Central Bank
of Nigeria (CBN), Mr. Godwin Emefiele, to come and brief the lawmakers
on the state of the economy.
However, the CBN Governor appeared before the apex chamber on
Tuesday, where he opened up to the Senate that the economy was in deep
trouble, with virtually no solution in sight. Corroborating the
submissions by Emefiele, the Finance Minister admitted the worrisome
state of the economy, but expressed optimism that Nigeria would get out
of the predicament and make positive advancement.
Her words: “Nigeria is in one of the toughest economic times we have
faced in living memory. We are very confident that the strategies that
we are deploying will get us out of the problems that we have inherited;
and those fiscal strategies are around: being very disciplined about
government spending, to reduce wastage and leakage; to ensure that we
invest in infrastructure that is needed to create jobs and growth in
this economy.
“Technically, in economic terms, if you have two periods of negative
growth, you are technically in a recession. But I don’t think we should
spend too much times on liable. Whether you call it recession or not, we
are in a tough place, but the most important thing is that we are going
to get out of it.
“Everything we are doing is moving outside of it; our social
intervention programmes have been funded, those of providing reliefs to
the very poorest, right down to every single local government would be
touched by that programme. We have started and we will continue with
it.” She said that the government had galvanized its think-tank to come
up with viable economic ideas and strategies to reverse the current
negative trend and reposition the economy to a sustainable boom.
According to her, “We are not the only country in recession, many
countries are doing far worse than us. But for Nigeria, 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.
“I believe the speed and the extent of our releases shows that the
government intends seriousness around reviving this economy and we are
very confident that the work we are doing will bear fruits. “We have
already begun to see increase in food production in our agriculture; we
are expecting a bumper harvest. How are we going to store to make sure
that prices don’t plummet? All the things we are doing are consistent
with what we said we would do.
“We have done a painful adjustment, but we want to assure Nigerians
that we are on a right track; we are in right hands. No money is being
wasted; no money is leaking, every naira is being accounted for fully.”
She discarded insinuations that the Federal Government had no formidable
economic team to drive the economy and lead the country out of the
present doldrums, pointing out that the team was actively working
towards surmounting the persistent economic quagmire.
The minister also disagreed with the Secretary to the Government of
the Federation (SGF), Mr. Babachir Lawal, who told the Senate last week
that the Federal Government would not be able to fully implement the
constituency projects due the dwindling revenue profile currently being
witnessed in the country.
“I am surprised to hear that some directors in Ministries,
Departments and Agencies (MDAs) instructed bidders to contracts not to
bid for constituency projects because they were not going to be
implemented.
“But I want to assure you that everything in the budget needs to be
implemented. We take constituency projects very seriously because they
have direct impact on the people.
We will prioritise and cash back them,” she promised. She further
revealed that the Federal Government had so far, in the last two months,
released N247.9 billion for implementation of capital projects,
pointing out that another N60 billion would soon be released. Adeosun
explained that out of the releases made so far, the Ministry of Works
received the sum of N74 billion, the Ministry of Agriculture got N21.9
billion and Transport received N22 billion.
She said: “Concerning the capital releases that we have done so far,
N247.9 billion has been released so far, with another N60 billion to be
released imminently. The Ministry of Works has received N74 billion in
the last two months compared to the N19 billion for the whole of last
year.
“Agriculture, which is a strategic focus of this government has
received N21.9 billion, compared to just N4 billion for the whole of
last year; and transport has received N22 billion compared to just N6
billion for the whole of last year.”
While stating that she inherited some debts from the past
administration, the minister advised that politicians should stop
playing blame game because that would not solve the problem facing the
country. “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, and contractors’ debt. “Cash calls of $5 billion outstanding to
the oil companies was also inherited. I mentioned the cash calls of $5
billion outstanding to the oil companies, I equally mentioned the fact
that 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 been 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, and I
explained how we are doing that, we have been extremely disciplined
around our spending,” she explained.
President of the Senate, who reacted to some of the issues raised by
the minister, regretted that there was no synergy between the executive
and the legislative arms of government, urging that the gap must be
closed to enable government make meaningful progress.
Saraki particularly reacted to Adeosun’s request that the National
Assembly should amend the Procurement Act, to ease the encumbrances
militating against procurement processes in the country, whereas the
amendment bill was passed early last month.
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