National Economic Council Approves FG’s Strategies To End Recession

Adeosun, GovernorsThe National Economic Council has approved President Muhammadu Buhari’s strategies to pull the economy out of recession.

This was done during its meeting in Abuja, chaired by the Vice President, Professor Yemi Osinbajo.

The council of ministers and governors debriefed the Finance Minister, Mrs. Kemi Adeosun and the Minister of Budget and National Planning, Mr Udoma Udo Udoma as well as the CBN Governor, Godwin Emefiele on the strategies to take the country out of the woods.

Briefing State House correspondents after the closed-door meeting, the Deputy Governor of Ogun State, Yetunde Onanuga, said that the Central Bank would henceforth adopt best options to manage the situation.

Other areas of urgent intervention were also agreed upon by the council to immediately inject larger funds into the economy, including meaningful diversification and more stringent importation cuts.

Intervention of affordable housing was also among urgent issues discussed, which the council said a target of one billion naira fund has been set up to create a blended pool of long term funds for housing development finance and mortgage provision aimed at delivering 500,000 housing units annually.

The council commended members of the National Economic Team for their diligence and hard work.

The council’s declaration comes barely 24 hours after the Deputy Senate President, Ike Ekweremadu, asked President Muhammadu Buhari to reshuffle his cabinet and redeploy the Minister of Finance and the Minister of Budget and National Planning from their present ministries.

Senate-Ike-Ekweremadu
Deputy Senate President, Ike Ekweremadu

As the Senate began debate on the state of the economy on Wednesday, Ekweremadu said that he was not impressed with the performance of the two ministers and believes they would perform better in other ministries.

Nigeria’s economy had slipped into recession after a report of the National Bureau of Statistics showed that the nation’s GDP contracted by 2.06% in the second quarter of 2016.

The report came just as militant activities have resurged in the Niger Delta, causing the revenue of the nation which comes largely from crude oil sales to drop.

The price of crude, which had dropped in the international market, already taking its toll on the nation’s economy was compounded by the attacks on oil installations in the Niger Delta.

Negative Growth Since 2012
The Minister of Finance, Mrs Kemi Adeosun, had recently said that the country had been in negative growth since 2012 with the hope that it would avoid recession but since the reality of the recession has dawned on the nation, the government was prepared to address it.

Kemi-Adeosun-Minister-of-Finance-Nigeria-on-Economy
Minister of Finance, Mrs. Kemi Adeosun

She said that the tactical plan of the Nigerian government to address its economic challenges would not change in spite of the official confirmation that the country had gone into a recession.

Mrs Adeosun was the guest of Channels TV’s breakfast programme, Sunrise Daily on Tuesday, September 20, where she explained that the solution to Nigeria’s problem remained the same from years past.

“Our plans haven’t changed. We need to stimulate the economy and we are going to do so largely by redirecting expenditure from recurrent into capital because we believe that capital expenditure will create jobs and create more productivity in the economy in the long run and help us to diversify,” she said.

She maintained that getting out of recession remains dependent on how productive the economy becomes as well as how well it can create jobs. “we’ve got to invest in our capital infrastructure,” she said.

Set To Inject Funds
The Minister had few days earlier said that the government was set to inject an additional 350 billion Naira ($1.1 billion) into the economy and raise $1 billion from Euro-bonds by mid-December to ease the recession.

She had told reporters in Abuja that the additional funding, on top of the initial 420 billion Naira released in May, was primarily for capital expenditure projects that would also involve support from local banks and transaction partners.

“We are raising money. As you know the Euro-bond capital raise is on.

Udoma-Udoma
Minister of Budget and National Planning, Mr Udoma Udo Udoma

“We are about to appoint advisers so we we will be raising additional $1 billion.

“Two weeks ago we approved the external borrowing plan and that was very important,” the Minister said.

While local investors feel neglected despite being in greater majority than the foreign investors for which the government is looking to attract back to Nigeria, the Minister for Budget, Senator Udoma Udoma, had reassuring words.

“We are determined to make it easier to do business in Nigeria and we believe that, working together with the private sector, we must surely transform this economy,” he told businessmen during a quarterly business briefing at the Presidential Villa with private sector stakeholders.

House Yet To Receive Executive Bill On Emergency Powers

House, Emergency Powers, Executive BillThe House of Representatives says it has not received the much talked about executive bill, seeking to give President Muhammadu Buhari emergency powers to tackle the economy.

The Chairman of the House Committee on Rules and Business, Representative Emmanuel Orker-Jev, said the House was yet to get the bill.

He was speaking on Tuesday at the lower chamber of the National Assembly in Abuja, Nigeria’s capital, upon resumption of the House after its annual recess.

Some lawmakers, Yusuf Tajudeen, Chris Azubogu and Obinna Chidoka told Channels Television on Tuesday that the bill, if presented, would be subjected to proper scrutiny.

They agreed that Nigeria needed to take active steps to revive the economy from its present stage of recession.

However, some Nigerians expressed doubt if the bill would be sent to the National Assembly or if sent, weather it would be passed by the legislative.

Legislative Bottlenecks

Giving his opinion on the yet to be presented bill, a member of the House, Rima Shawulu, had disagreed with the idea during an interview on Sunrise Daily.

Shawulu claimed that passing such a bill could enable the President to make decisions at will regarding projects, insisting that the Nigerian economy does not call for emergency powers.

On the contrary, a lawyer, Sanusi Musa, said the idea of seeking emergency powers was a good one, as the government must have seen the need to act faster in fixing the economy.

Musa agreed with the belief that legislative bottlenecks must be put aside if the economy must advance and added that seeking the help of the National Assembly would not prevent it from performing its roles of checking the executive and over-sighting all their activities.

Ending Recession: Our Strategy Has Not Changed – Adeosun

Kemi adeosun, recession, Finance Minister, CBNThe Minister of Finance, Mrs Kemi Adeosun, says the tactical plan of the Nigerian government to address its economic challenges has not changed in spite of the official confirmation that the country had gone into a recession.

Mrs Adeosun was the guest of Channels TV’s breakfast programme, Sunrise Daily on Tuesday, September 20, where the conversation centered on the state of the Nigerian economy.

She recalled that the country had been in negative growth since 2012 with the hope that it would avoid recession but since the reality of the recession has dawned on the nation, the government is prepared to address it.

“Our plans haven’t changed. We need to stimulate the economy and we are going to do so largely by redirecting expenditure from recurrent into capital because we believe that capital expenditure will create jobs and create more productivity in the economy in the long run and help us to diversify,” she said.

The Finance Minister noted that the solution to Nigeria’s problem has been the same and getting out of recession remains dependent on how productive the economy becomes as well as how well it can create jobs.

“To do so, we’ve got to invest in our capital infrastructure,” she maintained.

Emergency Powers

There have been talks about the executive arm of government sending a bill to the legislature seeking executive powers for the President to help drag the economy out of recession and Mrs Adeosun explained the rationale behind the bill.

She said: “There are a number of bottlenecks that we have already identified and which we think that given where we are, it might be worthy looking at how to unlock them.

“For example, we have pumped a fairly large amount of capital into the economy through various ministries, departments and agencies, some of whom have deployed it very quickly and are ready for more and we are about to release another tranche of 350 billion.

“But there are some ministries that have been slowed down by the procurement processes. It is about transparency versus speed. We want open tenders because that gives us the best price and that is what also gives opportunities to Nigerians to bid for and to get government contracts.

“If it is taking four to 16 weeks to get through the bureaucracy, at this point in time we think we can’t afford those delays. So we need to say ‘look, procurement laws are made for usual times and these are unusual times, can we look at relaxing some of the condition?’

“Similarly there is a transaction we are working on at the moment which is a very pivotal transaction with General Electric – they want to run freight on our own rail system which will create huge number of jobs across the country.

“But it’s bogged down in rules that say you’ve got to do this and that you’ve got to advertise and keep it up for a while. We don’t have that time.

“So there are some areas where I think it would be useful to have some legislative amendments.”

The Worst Is Over

The Minister also agreed with an earlier statement by the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele that the worst of the recession was over.

She explained that the level of problems that the economy has had to deal with  – ranging from the drop in oil price to the Niger Delta crisis that led to drop in oil production quantity are indeed the worst that could only have been imagined.

“So our worst case scenario in terms of our planning has already happened and I think that is probably what he was trying to say.

“From now on, the only way really is up. The only way is recovery, the only way is forward,” she assured Nigerians.

Low Interest Rates

As Nigerians await the outcome of the Central Bank’s Monetary Policy Committee (MPC) meeting, the Minister of Finance hoped that the committee would lower key interest rates.

Mrs Adeosun believes that this will help stimulate the economy, especially as the government plans to boost the economy without increasing debt servicing costs.

At the last committee meeting in July, the benchmark Monetary Policy Rate was raised from 12 percent, to 14 percent, while the Cash Reserve Ratio and Liquidity Ratio were both retained, at 22.50 per cent and 30 per cent each.

The CBN is also expected to give an update on new flexible forex market.

Nigeria Does Not Need Emergency Powers – Lawmaker

Economic Recession, Buhari, Emergency PowersSome experts have given their opinions on the reports that President Muhammadu Buhari has considered seeking emergency powers from the National Assembly in a bid to resolve the current economic problems in Nigeria.

While on Channels Television’s breakfast programme, Sunrise Daily, a member of the House of Representatives, Rima Shawulu, disagreed with the idea.

He claimed that passing such a bill could enable the President to make decisions at will regarding projects.

He was also of the opinion that the Nigerian economy does not call for emergency powers.

According to him, “there is no example of emergency powers anywhere in the world that has led anyone out of economic problems, instead it has led to even more problems”.

He expressed surprise at the idea purportedly pushed by the President and warned that passing the bill would mean that there is no need for the existence of the National Assembly.

Economic Recession, Buhari, Emergency PowersA lawyer, Sanusi Musa, however, said the idea of seeking emergency powers is a good one, as the government must have seen the need to act faster in fixing the nation’s economy.

He agreed with the belief that legislative bottle necks must be put aside if the economy must advance.

He added that seeking the help of the National Assembly would not prevent it from performing its roles of checking the executive and over-sighting all their activities.