The Ministry of Budget and National Planning says it has designed a fiscal
\nstimulus strategy that will help the country to come out of its economic
\nrecession.<\/p>\n
This is contained in a document entitled \u201c Turning a Crisis into an
\nOpportunity: the Economy and the 2017 Budget,\u2019\u2019 obtained by the News
\nAgency of Nigeria (NAN) on Tuesday in Abuja.<\/p>\n
The document was presented by the Minister of Budget, Sen. Udoma Udo
\nUdoma, at the recent Ministerial Retreat, to harvest ideas to come out of
\nthe economic crisis.<\/p>\n
Udoma said that Economic Management Team had been working on a plan to
\ngenerate an immediate large injection of funds into the economy.<\/p>\n
He said that the team had plans to generate and inject large amount of
\nfunds, principally in foreign currency, estimated at 10 to 15 billion
\ndollars into the economy.<\/p>\n
The minister said that funds would be generated through Asset Sales,
\nAdvance Payment for Licence renewals, infrastructure concessioning, use of
\nrecovered funds etc, to bridge the funding gap.<\/p>\n
\u201cTo achieve this speedily, we will need to fast-track procedures through
\nPresidential directives and legislation; a bill is almost ready for
\nsubmission to National Assembly.\u2019\u2019<\/p>\n
The minister, however, emphasised the need for the country to spend its
\nway out of recession through injection of large amount of money into the
\neconomy.<\/p>\n
\u201cThe 2016 Budget performance is reflective of the low revenue out-turns
\nattributable to the global and domestic developments earlier highlighted.<\/p>\n
\u201cOil revenues fell significantly in the second quarter compared to the
\nfirst quarter as a result of increased oil pipeline vandalism and
\nproduction shut-ins.<\/p>\n
\u201cNon-oil revenues also declined due to the acute shortage of foreign
\nexchange,\u2019\u2019 Udoma said.<\/p>\n
The minister said that the failure to diversify the economy and implement
\nthe national goals due to lack of discipline in the past had made the
\ncountry witness negative growth.<\/p>\n
He said that the government had put measures in place to diversify the
\neconomy.<\/p>\n
He said some of the measures included \u201c tackling challenges inhibiting
\nprivate sector participation in the upstream petroleum sector and building
\non the petroleum products deregulation (7.9 billion dollars or about 30
\nper cent of Forex demand in 2015).<\/p>\n
It will also boost agricultural production for food sufficiency, as food
\nimports has the third highest demand for Forex (3.4 billion dollars in
\n2015 or about 8 per cent of total demand).<\/p>\n
The minister said another measure was \u201cgrowing non-oil exports in the
\nlight of competitive and comparative advantage created by devaluation
\nfollowing the introduction of a market reflective exchange rate\u2019\u2019.<\/p>\n
In addition, he said that the government was working hard to resolve the
\nmilitant disruptions in the Niger Delta.<\/p>\n
Udoma said the major factor responsible for the recession was the over
\ndependence of the economy on revenues from a single commodity, petroleum.<\/p>\n
According to him, revenue source is not sustainable since the country
\ndoesn\u2019t control the price of crude oil.<\/p>\n
He said unsustainable structure was characterised by some indices,
\nincluding \u201coil sector less than 9 per cent of Gross Domestic Product (GDP)
\nbut about 80 per cent of government revenue and 95 per cent of Forex.<\/p>\n
Other indices are \u201cnon-oil sector about 90 per cent of GDP (of which 52
\nper cent was indirectly dependent on Oil) but less than 20 per cent of
\ngovernment revenue.<\/p>\n
According to him, another index is declining capital expenditure with
\nrising recurrent expenditure (2015 about 10 per cent capital) and import
\ndependent consumption growth model with stagnant growth in Investment to
\nGDP.<\/p>\n
Other indices, the minister said, included collapse of crude oil prices
\nfrom over 110 dollars per barrel in 2014 to less than 30 dollars per
\nbarrel in the first quarter of 2016 (recently rising but still less than
\n50 dollars per barrel).<\/p>\n
The collapse in the crude price has also led to reduced confidence,
\nleading to declining Equity and Foreign Investment Capital Inflows from
\n9.7 billion dollars by end of second quarter 2014, to 0.64 billion dollars
\nat the end of second quarter of 2016.<\/p>\n
NAN reports that Nigeria\u2019s economy formally entered recession in the third
\nquarter of the year when its Gross Domestic Product (GDP) in real terms
\ndeclined by -2.06 per cent in second quarter, according to National Bureau
\nof Statistics.<\/p>\n
The figure was lower by 1.70 per cent points from the negative growth rate
\nof 0.36 per cent recorded in the preceding quarter.<\/p>\n
By economic principles, an economy enters recession when the contractions
\nare observed at least two quarters.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Ministry of Budget and National Planning says it has designed a fiscal stimulus strategy that will help the country to come out of its economic recession. This is contained…<\/p>\n","protected":false},"author":1,"featured_media":53310,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[17],"tags":[],"class_list":["post-53308","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-exclusive"],"yoast_head":"\n