FG Admits Economic Recession, Lists 12 Action Plans For Growth

Kemi Adeosun

FEDERAL government on Thursday admitted that the country’s economy is in recession but assured that the situation is under control as necessary actions have been taken to the rescue the economy from collapse.

The Minister of Finance, Mrs. Kemi Adeosun, stated this on Thursday before the Senate as she was summoned to clear the air on the unpleasant reports pointing to disaster for the nation’s economy stressing that the recession was precipitated by months of negative growth but certainly under control.
“Technically, if you go into two quarters of negative growth, technically you are in recession. But I don’t think we should dwell on the definition. I think we should really dwell on where we are going.

“The policy that we have will ensure that we don’t go below where we need to go. I don’t think we should panic. I think we need to be confident around what we are doing and where we are going,” she told a Senate committee hearing in Abuja.

“I remain extremely confident about Nigeria. The IMF has given their projection, which is that we may continue into negative territory. I’m not sure that what we are seeing suggests that.

“If you look at what happened in the petroleum sector, before, we were subsidising around 45 million litres of fuel per day and now without subsidy, it has dropped to 26 million litres.

“That tells you that all the smuggling that was going out of the country based on the subsidy that we were providing has stopped.

“These are real savings to the economy which we are now re-directing into the essential infrastructure that will keep the economy going. That tells you that things are moving in the right direction”, Adeosun said.

It will be recalled that the International Monetary Fund (IMF) had on Tuesday said that Nigeria’s economy would contract by 1.8 percent in 2016 after having forecast a 2.3-percent expansion in April.

The key areas Mrs. Adeosun highlighted as being of immediate concerns to federal government with regards to tackling the alarming economic situation are as follows:

1. We would streamline the cost of government and improve efficiency of public service delivery across the Federal and Sub-national Governments.

2. Targeted spending on innovative social programmes and infrastructure, including social infrastructure.

3. Direct and model economic policies away from oil and towards non-oil revenues as global demand for oil decreases and supply increases

4. Focus on delivery of basic services to the Nigerian population upon which business can be built and improved standard of living can be achieved.

5. Build revenue capacity across Sub-national Governments by increasing IGRs to reduce dependence on the Federal Government.

6. Alignment of fiscal and monetary policies across medium and long-term goals. 7. Increase investor confidence in Nigeria.

8. Increased revenue mobilization and plugging of leakages.

9. Greater focus on Power, Transport, and Housing because these areas help to create wealth.

10.strengthen institutions of government across board including tackling corruption. 

11. A financial sector that is strong, resilient and able to support the real economy.

12. Inclusive and sustainable growth – mobile communication, film industry, financial inclusion, among others.