A meeting of the National Economic Council (NEC) held on Thursday morning at the State House Abuja.
Vice-President, Yemi Osinbajo presided over the session which was had state governors in attendance.
This is the last NEC meeting for 2019.
At their last meeting, the council received a memorandum from the Minister of Mines and Steel Development, Mr Lekan Adegbite on the current relationship between the three tiers of government in fiscal governance of the solid minerals sector.
Nigeria’s President, Muhammadu Buhari, will formally launch the Economic Recovery and Growth Plan (ERGP) 2017-2020 on Wednesday, April 5.
A statement issued on Tuesday by the President’s spokesman, Mr Femi Adesina, revealed that the ceremony will take place at the Council Chambers of the Presidential Villa in Abuja, the Federal Capital Territory.
The statement explained that the launch is “in furtherance of the current administration’s drive to sustain and build on the successes so far recorded in tackling corruption, improving security and revamping the economy.
The ERGP, which unveils a road map for Nigeria’s economic recovery, growth and sustainable development, was made public on March 7, while President Buhari was on his medical vacation in the United Kingdom.
The Media Adviser to the Minister of Budget and National Planning, Akpandem James, had said the ceremonial presentation will take place when the President returns from his vacation.
The Federal Government has released the Economic Recovery and Growth Plan (ERGP) which unveils a road map for Nigeria’s economic recovery, growth and sustainable development.
This was according to a statement issued on Tuesday by the Media Adviser to the Minister of Budget and National Planning, Akpandem James.
According to the statement, the development of the plan went through a rigorous process including wide consultation and robust engagements with stakeholders from a range of relevant fields.
They include: economic experts from the public and private sectors, academia, the Organised Private Sector, Civil Society groups, Organised Labour, sub-regional governments, International Development Partners (including the World Bank, International Monetary Fund and African Development Bank), the National Economic Council (NEC) and the National Assembly.
The statement hinted that the Plan has been approved by the Federal Executive Council, adding that its ceremonial presentation would take place when President Muhammadu Buhari returns from vacation.
Achieving Structural Economic Change
The statement read: “The core vision of the Plan is one of sustained inclusive growth. There is an urgent need as a nation to drive structural economic transformation with an emphasis on improving both public and private sector efficiency.
“The aim is to increase national productivity and achieve sustainable diversification of production, to significantly grow the economy and achieve maximum welfare for the citizens, beginning with food and energy security.
“The Plan envisages that by 2020, Nigeria would have made significant progress towards achieving structural economic change with a more diversified and inclusive economy. Overall, the Plan is expected to deliver on Five key broad outcomes namely: a stable macroeconomic environment, agricultural transformation and food security, sufficiency in energy (power and petroleum products), improved transportation infrastructure and industrialisation focusing on small and medium scale enterprises.
“Realising that the country’s economy would remain on a path of decline if nothing was immediately done to change the trajectory, the present administration, when it assumed office, embarked on strategic moves to halt the trend and redirect the course of the country’s economy and growth process.
A Knowledge-Based Economy
“The process started with the development of the Strategic Implementation Plan (SIP) for the 2016 Budget of Change as a short-term intervention. The ERGP, a Medium Term Plan for 2017 – 2020, builds on the SIP and has been developed for the purpose of restoring economic growth while leveraging the ingenuity and resilience of the Nigerian people.
“The Plan seeks to eliminate the bottlenecks that impede innovations and market based solutions, recognises the need to leverage Science, Technology and Innovation (STI) to build a knowledge-based economy, and is consistent with the aspirations of the UN’s Sustainable Development Goals (SDGs).
“The ERGP differs in several ways from previous strategies and plans as it:
is anchored on focused implementation which is at the core of the delivery strategy over the next four years;
outlines bold initiatives such as ramping up oil production to 2.5mbpd by 2020, privatising selected public enterprises/assets, and revamping local refineries to reduce petroleum product imports by 60 percent by 2018;
builds on existing sectoral plans such as the National Industrial Revolution Plan and the Nigeria Integrated Infrastructure Master-plan;
signals a changing relationship between the public and private sector based on close partnership.
utilises the value of the merger of budget and planning functions into one Ministry to create a better and stronger link between annual budgets and the ERGP; and
provides for strong coordination with the States to ensure that the Federal and sub-regional governments work towards the same goals.
Vision Of Inclusive Growth
“The thinking behind the development of the Plan was driven by several fundamental principles, including a focus on tackling constraints to growth; leveraging the power of the private sector and promoting national cohesion and social inclusion, as well as allowing markets to function.
“The Plan has three broad strategic objectives which are expected to help achieve the vision of inclusive growth: restoring growth, investing in the people, and building a globally competitive economy.
“The ERGP focuses on achieving macroeconomic stability and economic diversification by undertaking fiscal stimulus, ensuring monetary stability and improving the external balance of trade.
“The delivery mechanism has been identified as a major determining factor in the successful implementation of the Plan. The implementation strategy therefore focuses on prioritising the identified strategies, establishing a clear system of accountability for well-defined assignment of responsibilities, setting targets and developing detailed action plans, allocating resources to prioritised interventions, creating an enabling policy and regulatory environment, developing an effective monitoring and evaluation system to track progress, and using effective communication strategies”.
The Federal Government has commenced the verification of its monthly Budget Support Facility to the states.
The importance of the exercise is to ensure that benefiting state governments comply with the mutually agreed Fiscal Sustainability Plan prescribed by the National Economic Council (NEC).
The resolution was reached at the first NEC meeting in 2017, presided over by Vice President Yemi Osinbajo on Thursday at the Presidential Villa in Abuja, Nigeria’s capital.
The Minister of Finance, Mrs Kemi Adeosun, said that eight accounting firms have been appointed and had already begun the audit process.
She also told the council that the balance in excess crude account stands at $2,458,382,844.03 as at February 15, 2017.
The minister hinted that the National Sovereign Investment Authority (NSIA) plans to increase domestic infrastructure investment in 2017, as there are compelling opportunities in the environment.
She explained that the focus would be on social infrastructure, including affordable housing and healthcare through the development of specialist hospitals and to this end, the council has decided to inject a fresh $250 million into the Sovereign Wealth Fund sourced from the excess crude account.
On agriculture, the council was informed of the massive wheat production in Jigawa, Kano, Kebbi and Zamfara states among others.
The State Governors at the meeting, however, appealed to the Federal Government to make plans for the purchase of excess wheat to ensure price stability and sustainable production.
The council subsequently agreed to discuss and make adequate buy-back arrangements in order to support price stability.
After a brief presentation on foreign exchange policy options by the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, members of the council generally expressed concern over the current situation of the exchange rate.
They called for an urgent review of the current policy, especially the gap between interbank and the parallel market rates.
In his response, Mr Emefiele sued for patience and understanding, assuring the council that the situation was being closely managed.
The National Economic Council (NEC), presided over by Nigeria’s Vice President, Professor Yemi Osinbajo, has endorsed a new funding regime for the oil and gas industry.
This will in turn, eliminate the often arduous and onerous cash call regime which has stalled growth in the industry.
The alternative funding stream had been approved earlier this week at the Federal Executive Council meeting and then presented to NEC, as the body mandated to come up with “measures necessary for the coordination of the economic planning efforts of the various governments of the federation”.
Minister of state for Petroleum, Ibe Kachikwu, who briefed State House Correspondents after the meeting, said:
“the current upstream joint venture arrangement in Nigeria’s oil and gas industry, is unincorporated, meaning that NNPC and the International Oil Companies (IOC’s) partner in each joint venture as unique and separate.”
According to the minister, from January to November 2016, under-funding of the NNPC cash calls is estimated at USD $2.3 billion.
This is in addition to the inherited arrears estimated at USD $6.8 billion for 2015 year ending.
Other highlights of the meeting included how to energize the MSME’s as a major economic growth driver in the country.
On the other hand, council observed that there are over 37 million MSME’s in Nigeria, contributing over 84% of the job opportunities in the country, with Lagos as the highest contributor.
The Central Bank Governor, Mr Godwin Emefiele, then told council that the CBN has a fund in excess of 200 billion Naira to provide affordable loans to MSME’s in the country.
Minister of Finance, Mrs Kemi Adeosun however reported to council that as at November 2016, the balance of excess crude proceeds stands at $2, 455,790,144- which is about $2.4 bln
The Federal Government has described as mere speculation, talks of a proposed sale of national assets for the purposes of getting Nigeria out of recession, saying government is yet to take a decision on the matter. Speaking to State House correspondents after the Federal Executive Council meeting, the Minister for Information and Culture, Alhaji Lai Mohammed, said it was only discussed and endorsed as a Medium Term Expenditure Framework and remains a suggestion but not a solution decided upon by government to rebound the economy.
Contrary to reports that government has already listed conditions that must be met before the sale of certain national assets, top among them the insertion of a buy-back clause in the assets sales agreements, the Information Minister says government is yet to reveal elaborate plans to take the country out of recession.
The National Economic Council headed by Vice President Professor Yemi Osinbajo had last Thursday proposed and endorsed plans to sell some national assets, in line with government’s target to raise between ten to fifteen billion dollars to revamp the economy, following the drop in the nation’s monthly foreign earnings to about three hundred million dollars.
The proposed sale was swiftly rejected by the Senate in a thorough debate at its plenary, just as the Nigeria Labour Congress (NLC) threatened to embark on mass protest against the proposed sale. The Federal Executive Council meeting also approved three memos; the National Water Policy, the National Irrigation Policy and a draft National Water Resources Bill all aimed at tackling the numerous water challenges in the country.
The Water Resources Minister, Mr Suleiman Adamu, is positive that the three bills and policy will help Nigeria bridge the gap in the sector and enhance Nigeria’s current agricultural production agenda and the National Irrigation Policy Roadmap 2030.
Nigeria has lost huge revenue to corruption and many fear corrupt officials could embezzle the funds. They are suggesting that the government should look at other means of generating funds or explore the right channel in the privatisation of assets.
Fiscal Stimulus Plan
Explaining the government’s fiscal stimulus plan earlier on Saturday, the Minister of Budget and National Planning, Senator Udo Udoma, said that the primary objective of the plan was not to sell off all major critical national assets but to source immediate funds to reflate the economy and implement capital projects in the 2016 budget.
Senator Udoma gave the explanation in Lagos at the weekend while briefing reporters on the forthcoming Nigerian Economic Summit.
He said the intention of the government was just to get enough money to fund the 2016 budget and get the economy back on the path of recovery.
The government, he stated, needed to inject a large dose of funds into the system to get the economy back on track and to faithfully implement the provisions in the capital budget tailored at reflating the economy and aiding the diversification process.
Senator Udoma further explained that the country had lost almost half its expected revenue and would need to urgently source for the shortfall to enable the government faithfully implement the budget.
“This unfortunate scenario prompted the Economic Management Team to urgently work out a fiscal stimulus plan to generate immediate large injection of funds into the economy through asset sales, advance payment for license rounds, infrastructure concessioning, use of recovered funds, among others, to reduce the funding gap.
“The other option would have been to source for additional loans, beyond the level of borrowing already projected for in the 2016 Budget.
“This would not be a wise option as it would raise the level of debt service to an unsustainable level.” a statement by the Minister’s spokesman, Akpandem James, read.
On September 22, the National Economic Council 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.
Nigeria’s economy has slipped into recession with a 2.06% contract in Gross Domestic Product in the second quarter of 2016.
According to a report of the National Bureau of Statistics the decline has caused the Naira to get weaker while lower oil prices dragged the oil sector down.
The output shrunk by 0.36 in the first quarter.
During the quarter, nominal GDP was 2.73% higher at 23.48 million Naira at basic prices.
This growth was lower than the rate recorded in the second quarter of 2015 by 2.44% points.
The National Economic Council (NEC) has called for the establishment of special courts to prosecute all those caught in oil theft in the country as a way to get rid of the menace.
The recommendation formed part of a committee’s report presented to the council presided over by Vice-President Yemi Osinbajo.
Professor Osinbajo chaired the council, which has all state governors, the governor of the Central Bank of Nigeria and the Minister of Budget and National Planning among others as members.
The Kogi State Governor, Yahaya Bello, Bayelsa State Deputy Governor, John Jonah; Enugu State Deputy Governor, Cecilia Ezeilo, and the Minister of Budget and National Planning, Udo Udoma, briefed State House correspondents at the end of the meeting.
The Bayelsa State Deputy Governor said he reported to the council that the committee, set up in 2013, consulted widely with relevant stakeholders including the armed forces, the Joint Task Force, oil companies, oil producing states and the Nigerian Security and Civil Defence Corps among others in preparing the report.
According to him, the Committee identified causes of oil theft to include inadequate operational patrol vessels to conduct patrol of entire pipeline network; massive unemployment among youths; and non-availability of petroleum products in the Niger Delta.
He said government was also asked to focus on restoring upstream production by positively engaging host communities to put the current militancy to an end and focus on improving government funding in the upstream sector where funding has been less than 30%.
President Muhammadu Buhari has granted state governments relief from the monthly deductions regarding CBN salary assistance loans, to enable the states recover fully from the current financial crunch.
Minister of Finance, Mrs Kemi Adeosun said this while briefing State House correspondents on the outcome of the National Economic Council meeting presided over by Vice President Yemi Osibanjo.
The Minister called on the state governors to submit details of their financial data to enable the government to predict how much support they would be needing.
Also, the National Economic Council is to reconstitute the board of the Niger Delta Power Holding Company with representatives from the six geopolitical zones.
The National Economic Council also adopted the national road safety strategy document to address the current overlap and streamline the role and responsibility of the road safety management activities.
The council decried the current petrol crisis in the country urging Nigerians to be patient with the NNPC as efforts are in place to get the queues out by next week.
Barely 24 hours after the Federal Executive Council meeting, another major executive meeting; the National Economic Council (NEC) meeting, has been summoned by the Presidency.
The meeting, presided over by Vice President Yemi Osinbajo, had most of the governors in attendance.
The meeting which ended at about 4:50PM, discussed the lingering fuel scarcity and the need for state authorities to pay salaries.
Also discussed were strategies to boost Nigeria’s reserves in the Excess Crude Account and then the power challenges in the country.
At the Federal Executive Council meeting held on Wednesday, short-term and long-term plans were made to revamp the nation’s refineries before the end of 2017 and also put an end to importation of petrol by 2019.
The FEC also said that petrol supply would be available before the end of May, with Port Harcourt and Kaduna Refineries supporting supplies.
It is expected that the ongoing National Economic Council meeting would be discussing ways to implement the plans by the Federal Executive Council.
The March retreat, according to the Vice President, was to provide a forum for in-depth discussions by NEC members of the policy actions that the states and the Federal Government could consider in order to stimulate local production, cut costs and enhance public revenues among other measures to stimulate the economy.
The NEC comprises of the 36 state governors, the Governor of the Central Bank of Nigeria and other co-opted members.
The NEC is chaired by the Vice President, Yemi Osinbajo.