We’ll fast-track solutions to recession – Buhari

We’ll fast-track solutions to recession – Buhari

President Muhammadu Buhari, yesterday, said the Federal Government was considering fast-tracking the solutions to engender a rebound in the country’s economic fortunes.

He spoke on a day mixed reactions trailed the declaration of the Central Bank of Nigeria, CBN, last weekend, that the country’s recovery from recession would begin in the last quarter of the year, specifically December. While some players in the private sector, such as the Manufacturers Association of Nigeria, MAN, contended that it was not possible for the country to recover in so short a period, others as Bismarck Rewane noted that though the country had bottomed out on the way to recovery, full recovery would take no less than 18 months to achieve. President Buhari, who spoke at the Nigerian Institute of Management’s 2016 Annual Management Conference in Abuja, with the theme, Building a New Nigeria: Strategic Options and Policy Imperatives, also solicited support of every Nigerian in the quest to move the country forward, instead of sitting back to criticise every attempt at governance. Buhari, who was represented by the Head of Civil Service of the Federation, Mrs. Winifred Oyo-Ita, said:  “The Nigerian project is faced with several challenges on every facet of the society and the solutions to these challenges must be fast tracked, if we must get the economy up and running again. President Muhammadu Buhari (l) and President Mahmoud Yousufu of Niger Republic participating in a high level meeting at the ECOSOC Chambers, during the 71st General Assembly of the United Nations, UN, in New York, yesterday. Photo: Abayomi Adeshida. “I want to use this opportunity to urge other professional bodies, corporate bodies and well-meaning Nigerians to emulate the kind gesture of NIM by lending their support to this administration, instead of sitting by to criticise every attempt at governance. It is by synergising with government that we can all build the Nigeria of our dreams.” Buhari vowed to continue his fight against corruption and other associated social vices at all levels of national life until they were exterminated from the body polity. “To set this country on the path of greatness and prosperity, complete elimination of all forms of corrupt practices must be on the front burner and our collective consciousness always. “You will agree with me that great nation is the reward of great leadership built on good governance. This is our motivation and value proposition,” he maintained. Also speaking, President and Chairman of Council of NIM, Emeritus Professor Munzali Jibril, blamed the country’s abysmal performance in all indices of development over the years on the colossal mismanagement of the country’s resources. OIl, curse of Nigeria —NIM He also disclosed that the discovery of oil in Nigeria was the root cause of the country’s economic woes. According to him, oil has been more of a curse than a blessing to the nation, as the country practically abandoned every other source of revenue, such as agriculture and solid minerals, and relied solely on oil as its cash cow ever since. He argued that no country manages itself like Nigeria and still experience development, stating that the country was guilty of all manner of sleaze, corruption and other social vices, which had continued to erode the financial, attitudinal and moral structures on which the nation stood. Jibril said:  “It is also instructive to note that Nigeria has succeeded in building strong individuals and weak institutions. It is an incontrovertible fact that real development eludes any nation which dissipates its resources in building strong individuals to the neglect of strong institutions, because every progressive and rapidly developing nation is founded only on strong institutions.” Jibril lamented that the trillions of dollars the country earned from crude oil over the years were squandered, instead of being used to eliminate poverty and develop the country. “As the world’s seventh largest producer of oil, the nation has earned stupendous income from the resources and, therefore, has no business being poor and under-developed. Osinbajo reaffirms private sector role in economic recovery programme meanwhile, the Vice President, Prof. Yemi Osinbajo, yesterday, reaffirmed the role of the private sector in the economic recovery programme of the Federal Government. He gave the indication at the Presidential Quarterly Business Forum with the private sector held at the Banquet Hall of the Presidential Villa, Abuja. He said: “Let me point out that there is no question at all that the private sector is crucial”. Osinbajo said the Federal Government would continue to work with the private sector in all aspects of the economy, being the engine of development. The Vice President said that the engagement was to focus on game-changing models which would make huge difference in the economy. He mentioned the up-coming 650,000 barrels per day Dangote Refinery as an example. “If Dangote Refinery comes on stream by 2018 that would significantly affect the economy. About 30 per cent of our foreign exchange outlay today is on importation of PMS (Premium Motor Spirit). If we can deal with that 30 per cent, obviously there will be less pressure on our foreign exchange reserve,” he said. He said the sub-sea pipeline being constructed would take care of the vandalism of pipelines, while the Indorama Sorghum plant and other private sector projects would help the economic recovery. Osinbajo said the nature of the recession in the country should be understood by everyone, adding that the country started to experience recession because of the activities of oil and gas vandals. “If we did not have the vandalism of pipelines in the Niger Delta, we probably would not have entered into recession by now. There is no place anywhere in the world where you can lose one million barrels per day in oil production when you are projecting 2.2 million barrels per day and you would not suffer tremendously. It becomes so, especially when that same revenue is what drives your non-oil revenues,” Osinbajo said. He advised that the country should look for solutions that were peculiar to its circumstances. “We have to look at what problems that we have and try to focus on some solutions that can come from there.” The Vice President said the Federal Government was engaging the Niger Delta stakeholders already to find a way out of the ugly situation. Recession: FG to inject $10b-$15b into economy —Udoma The Federal Government is to inject between $10 billion and $15 billion into the economy as a stimulus package to steer it out of recession and make Nigerians heave a sigh of relief. This is contained in a communiqué issued at the end of a one-day retreat held, last week, at the Presidential Villa and declared open by President Muhammadu Buhari. In the communiqué made available to Vanguard, yesterday, by the Budget and National Planning Ministry, organisers of the retreat, the minister, Senator Udoma Udo Udoma, was quoted as indicating that the huge amount would be derived from asset sales. The communiqué said the minister had indicated a fiscal stimulus strategy was being developed, involving, amongst other things, a plan to generate and inject large amount of funds, principally in foreign currency, estimated at $10 – $15 billion into the economy through Asset Sales, Advance Payment for License renewals, infrastructure concessioning and the use of recovered funds to bridge its funding gap. “The minister also indicated that government was also planning to introduce measures for fast-tracking procedures so as to speed up the processes of getting the funds into the economy. “Some of these will be achieved by Presidential Orders and Directives. In addition, an Emergency Economic Recovery Bill is also being prepared for submission to the National Assembly to deal with those changes requiring legislation,” the communique said. Recovery: Abuja Chamber of Commerce disagrees with CBN the President of Abuja Chamber of Commerce and Industry, Mr Tony Ejinkeonye said the Chamber totally disagreed with the promise of the federal government that recession would be over by December this year. Ejinkeonye, who spoke to Vanguard in Abuja, yesterday, said it takes a minimum of five years for any country to recover from economic recession, adding that the federal government had no physical measures in place to determine that the country would be out of the wood in the next three months. He said: “We have economic recession, economic recovery and economic boom. It takes a period of five years for a country to recover from recession before it can start talking of economic boom, that is, if the right measures are in place. We are yet to know the physical measures the government has put in place to enable us know that we are on the right track. Even when the right decisions and policies are set out, we do not agree that recovery will come too soon. “Government is not doing what it should do or be doing to determine that the country will be out of the recession. For instance, Thailand went into recession and it was just last year they came out of it. The federal government is either economic with the truth or not telling us what is really happening.” No structure on ground for recovery —MAN Reacting to the CBN’s claim that the country’s economic recovery would begin in the last quarter of the year, Manufacturers Association of Nigeria, MAN; Managing Director/Chief Executive, Financial Derivatives, Mr. Bismarck Rewane and others have said that for Nigeria to fully recover from recession, it will take not less than eighteen months. Also Prof. Uche Uwaleke, Head, Banking and Finance Department, Nasarawa State University, Keffi, said the country’s economy had not deteriorated to the extent that government will sell off some of its assets to generate revenue. He said:  “I do not think the state of the country’s economy has reached the point where viable national assets such as the NLNG must be sold in order to generate revenue. If a country is in a liquidity trap to the point where the government loses the capacity to borrow, then it can sell its assets. Reacting to CBN Governor, Mr. Godwin Emefiele’s assertion that the Nigerian economy will begin to see growth as from the first quarter of 2017, Mr. Frank Udemba Jacobs, President, Manufacturers Association of Nigeria, said:  “I do not agree that the economy will be out of recession by the end of this year. Government does not have structures on ground to suggest that it would happen. I do not think it is going to happen. “That means they have only one quarter to get us out of the recession that is so deep.  We do not believe that. It will take a while. Changing of attitudes that they are suggesting will take some times. It won’t happen overnight. “People do not have confidence now and bringing up foreign reserve will take some time. It won’t happen overnight and there are so many inconsistent policies that need to be straightened out in order to engender the confidence of local and foreign investors. Stressing on inconsistent policies, Jacobs said:  “These things take time to happen. First the government need to have some policies that would let private sector drive the economy. It is not just saying it but doing it. Their actions and policies must suggest that and if that is not done, we cannot be thinking of getting out of recession so soon.” It takes a long time to recover from recession —Rewane Bismarck In his reaction to the CBN Governor’s assurance, Bismarck Rewane said that it takes a long time to recover from recession. He said:  “The last time I checked, the Central Bank was in charge of monetary policy and not in charge of Fiscal policy. The people that should talk about recession are the people in the budget office, but now that he has made that comment, he must be very clear as to what he means. “There is no silver bullet. You do not come out of a recession as if it is a tap you just put on and off. It takes a long time to come out of recession. Maybe, he means the initial signs of recovery will become clear to everybody. I do not want to misquote anybody, but I think there must be some reasons for him to make that statement. “Maybe, he is saying that the recovery is coming from next quarter; he is not saying it is here now. I do not think he will say that. He may be saying that the beginning of the signs of recovery may become manifest. As far as I know, we have bottomed out but this third quarter is going to be negative as far as I know. The quarter is ending in two weeks, now because of the stimulus package, we may get to zero. That is my personal view. “You know it’s like a crystal ball. Everybody has a crystal ball. My own crystal ball tells me it’s going to take 18 months but there are other people who think there can be miracles. This is a prognosis. As far as we have diagnosed that we are in a recession, the treatment has hardly started and then people are saying you will get well in so so time. And then I am saying that this treatment will last 18 months before we will be well again. But the fact that we will be well in 18 months does not mean we would begin to see the sign of wellness very soon.” Uwaleke kicks against sale of FG’s assets Prof. Uche Uwaleke, Head, Banking and Finance Department, Nasarawa State University, Keffi, says the country’s economy has not deteriorated to the extent that government will sell off some of its assets to generate revenue. He explained that it was only a bankrupt state that could sell its national assets and Nigeria could not be said to be bankrupt. He said that was the reason the government hoped to borrow from external sources, including issuing Eurobonds to revamp the country’s economy. “Notwithstanding the high ratio of debt service to government revenue, the ratio of the country’s debt stock to GDP at less than 25% is within sustainable level. “And it is one among the lowest in the world,” Uwaleke added. On the way forward, Uwaleke urged the government to apply both monetary and fiscal stimuli to tackle the recession. He also urged the Central Bank of Nigeria to ease the monetary policies to enable SMEs get cheaper access to funds to do business and strengthen the country’s currency. “On the fiscal side, the Federal Government should move speedily to obtain concessional foreign loans that should be channeled into employment generating activities such as agriculture, solid minerals and infrastructure. Committed efforts in these areas will ultimately open up multiple streams of foreign exchange and strengthen the naira in the process,” Uwaleke said. He said that any attempt to dispose viable government assets to temporarily shore up reserves could create the wrong impression for the country. ECCIMA reaction Director-General, Enugu Chamber of Commerce, Industry, Mines and Agriculture, ECCIMA, Emeke Okereke, said:  “It is a welcome assurance but beyond that, we hope that it will translate to touch positively the lives of Nigerians in terms of expanding the economic space for entrepreneurship to thrive. We also hope that the purchasing power of Nigerians will be increased. We doubt if December deadline is achievable — BENCCIMA The Director General of the Benin Chamber of Commerce, Industry,Mines and Agriculture, BENCCIMA, Mr Imalingmhe John Yesufu, expressed doubt over the assurance made by the Federal Government that the current recession will be over by December this year. He said unless the Federal Government had a short terms programme that will check the current economic hardship being face by Nigerians, ending the crisis by December might be a mirage. He said: “If the CBN is saying that recession will end by December, they should be able to present to Nigerians what they have between now and December. If nothing is done to improve the value of the naira, things will continue to be hard. We have not started implementing the budget of next year, we are still implementing that of 2016. “If they said by December it will be over, the question is what are they going to do between now and December to improve the massive unemployment we have in the country. This is because if our people are not employed, the economy cannot grow.”

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