From Uche Usim, Abuja
Finance Minister, Mrs. Kemi Adeosun, has assured Nigerians that the current economic recession jolting the nation will be over in a short while and that the country will emerge stronger than it was long before the pre-recession era.
She said the Federal Government has taken far-reaching measures to reflate the economy, urging Nigerians to exercise little patience.
Speaking in Abuja recently at a press briefing on the state of the nation’s economy, the Minister said about N400 billion had been injected into the economy between May and August, revealing that it was on the verge of buoying the economy with additional N60 billion.
Below are excerpts from the briefing.
State of the economy
Nigeria is going through tough times at the moment and there is no doubt about that. I’m not someone that will come here and try to deceive you people by saying it isn’t. But the question is; will we come out of it? The answer is yes. We’ll come out of it and we’ll come out better than we went in. We have the potential needed to come out of it.
Again, the country hasn’t attained it’s full potential. Since I was a kid, we’ve talked about unlocking and attaining Nigeria’s full potential and now I’m close to 50 and we’ve not not actualised that.
However, this time round, the Buhari administration is taking giant steps to ensure we attain our potential. Like it has been said over and over again, oil has been a curse to this country because all our attention was focused on it and so we abandoned other fundamentals we ought to use to sustain our economy and make it strong even when the price of oil crashed. Crude oil took us to a lifestyle and so we didn’t invest in infrastructure. Infrastructure was in bad shape when we came in. What makes our factories uncompetitive is that they run on generators while others factories in other countries run on grid.
Again, we freight our goods on so many bad roads, there is poor port clearance resulting to delays and demurrage piles up. All these add to the high cost of doing business in Nigeria and make the country unattractive to do business. With this analysis, you discover that the price of goods in Nigeria is higher than in other places. All these stem from poor infrastructure. We need to fix that. We need to be able to manufacture most of what we need. From what we wear to what we eat and all that and we are trying to create room to achieve it. Oil boomed at $110 a barrel to about $50 which is the best we’ve seen in two months. At a point, it was as low as $28 and so, we’re working with much less money and we’re trying to do much more. But there’s hope. We’re tackling the challenges headlong.
We didn’t also prioritise our spending in the past. We spent more on travels and hospitality than roads. We spent more on training than we spent on housing. Some roads we have now were built over 40 years ago. We have to invest in long-term capital expenditure that will allow our economy to grow. We need to change that and good a thing, we have what it takes to change it. We have good rainfall, arable land, solid minerals, natural resources, a very young and vibrant population, educated people and all that. So, all the ingredients to make our economy grow are actually here in Nigeria. So, if we put these things together and we have the patience to see them materialise, our country will be better for it. We need patience. We have all the indices. Things are tough but the truth is that there is a machinery in place to improve our situation. That’s the truth.
When we came in, the treasury was empty, government was owing. We have contractors that have not been paid since 2012. One of them came the other day and said he has taken off 8,000 staff. We paid them and they reabsorbed them. We’re working hard to improve the economy and what we’re suffering is a consequence of past decisions with regards to policies and effects. That’s the effect we’re seeing now. We’re encouraged by what we’re seeing today. We’re seeing agrarian states that had abandoned agriculture going back to it. That’s very very important. We’re seeing cost consciousness among government agencies. It simply means you can’t spend money anyhow. We’re seeing cutting down foreign trips. So, now, we’re getting value for money and that’s a great foundation.
Again, we’re addressing under-investment and that would allow industries to spring up. For instance, there’s an arrangement we’ve put in place for efficient freight of goods by rail. General Electric is coming to run that with us. That will save importers and exporters 35 per cent of freight cost. That’s huge savings.
More so, work has started at the international airports terminals. We were owing N4.5 billion and we had not paid our counterpart funding of the contract sum and all. But we’ve settled that. They’re back to work. In fact, all across the country, we’re paying contractors and they’re back to work. We’re looking for ways to grow the economy and ways to create jobs. Affordable housing in the offing too. Things are looking up. Things will improve.
Spending from TSA
To spend the money meant for individual government agencies is not a wise thing to do because it can cause over a thousand crisis. The TSA money is warehoused for the MDAs. They spend from it when they need to. Take for instance the oil industry, the foreign oil companies put their monies in a joint account with NNPC. So, to spend that money will be wrong because when they need to do their drilling, there will not be any money for that project. However, there is money meant for the consolidated revenue account which we mandate the agencies to comply with. That’s the money we can spend because the account is owned by the Federal Government. Spending from TSA may seem like a good solution but it’s actually not right. What we benefit from TSA is one, control. We’re able to see what we spend.
We’ve cleaned our payroll and in the process, thousands of ghost workers were detected. Aside that, we have agencies where people don’t even have what to do. They just idle away. Some don’t even come to work but they earn salaries. You see 10 drivers in some places but no vehicles to drive. Some don’t have where to sit. No jobs to do. We need to clean that up and we’re doing just that. We’re really working hard to leave a good legacy. We must leave things for the next generation. All we’re striving to do is not for us. Mr President is tackling the challenges from the root and not just embarking on short term palliatives. He could make people happy by engaging in some small projects while neglecting the major ones. But we will still come back at the point we find ourselves. We have 170 million people in Nigeria and we need economic patriotism. Local producers employ local people and that will help us address unemployment.
The government appears slow but we want to get it right. We research and strategise before we take actions.
Made in nigeria goods
The National Orientation Agency (NOA) has been charged for the sensitisation and campaign for the patronage of made in Nigeria goods and on our part at the Finance Ministry, we try to push agencies to buy locally made goods as much as possible. I mean, why buy imported goods when a local substitute is available? I agree that the government should lead that campaign but again, all of us are involved. Let’s ask ourselves; what are we importing from outside that can be found here? The imported one may be cheaper and better but with continuous patronage of locally made goods, they will eventually become cheaper and better. Again, why go to Accra for a programme meant to improve Nigeria? Why not Kano or any state in Nigeria? We recently held a programme in Kano and those that attended fell in love with the place. Some have even said they’ll go back there for holiday and all that. That’s what we need to do. Let’s look inwards. Let’s think Nigeria and it’ll help the country. .
Partnership with China
I’m not aware of any partnership with China. I wasn’t on the trip to China.
Yes, we have various contracts with China EXIM Bank but in signing those contract, we imbeded local contents in them, which means that if there are local hands that can handle it let them do it.
We’re working really had for the economy to bounce back. We have spent N400 billion from May when budget was signed till now on various projects. We’re injecting another N60 billion. We have to ensure transparency and we’re getting over delays in executing projects. We’re also following due process. Like I said earlier, we inherited huge debts.
Some contractors are owed since 20012. A particular one was owed N81 billion and we gave him N20 billion and urged him to use it to work and then we will address the arrears. Majority of them have heeded our call while some said what we paid them was just interest on the loan they took. We’re borrowing but we’ve also increased our revenues.
As money comes in, we’re pushing it out because we believe our economy will improve over time. It’ll take some time. We got here over time.
Some PPP projects have failed and we’re looking at how to address that so that more private sector players can come in.
We’re trying to stimulate and diversify the economy too. On the revenue side, we’re a committed to overhauling our tax system. We need to see the impact on the private sector. If you do a revenue drive and put people out of work, it wouldn’t be good.
We had a meeting with a committee on duty waivers and our findings show a gross abuse of waivers and we had to set up a committee to fix that because all steps we take must have value additives on the economy.
It’s no longer under the Finance Ministry but Budget and Planning but we want to pass it early so that it starts to be implemented from January 1 as it should be. We will work closely with them.
Reform of civil service
We’re merging overlapping MDAs and we’re also restructuring to plug wastages and leakages.
End of recession
I don’t want to give a time lag to it but we’re on course to exiting recession and If we stick to what we need to do to improve our lots like fighting corruption, that will be fine. If you see the exhibits we have in the course of fighting corruption, you’ll marvel. You’ll see jewelries whose value can build houses. We’ll bring you to see the exhibits of what our money was used for. We’ve been given the mandate to manage the recovery and again, if we stick to cutting out wastages, duplication, we will be fine. We spend N165 billion on salaries. The workforce is just bloated but every month, our payroll is cleaned up and thinned down. If we redirect the money elsewhere, well be fine soon. Recovery is a gradual thing.
We inherited N65 billion arrears on fertiliser. In 2015, farmers didn’t have access to fertiliser and so we largely recorded low yield. This was coupled with shortage of food in some West African nations which had to buy food from Nigeria. It put pressure on our food. The good news is that this year, we’re expecting a bumper harvest. We just want the silos to be ready to accommodate the food we’ll produce. Kebbi, Ebonyi, Anambra are producing rice in large quantities. We’ll get there. We are churning out permanent positive changes.