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Nigeria Technically In Recession –Adeosun

kemi adeosunThe 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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