…Fine-tunes economic recovery plan
From Juliana Taiwo-Obalonye, Abuja
The Federal Government yesterday said it is yet to decide on the size of World Bank loan it intends to apply for to close the funding gap in its 2017 budget.
The Minister of Budget and National Planning, Udoma Udo Udoma, made the disclosure at the end of the longest Federal Executive Council (FEC) meeting (over seven hours), presided over by the Acting President, Yemi Osinbajo. Udoma was responding to a question on whether the World Bank loan formed part of council’s deliberations and the decisions reached.
He said, ”the figure will depend on the (2017) budget approved by the National Assembly. We are waiting for the passage of the budget by the National Assembly so that we will know the budget gap or the actual deficit before we can go to the World Bank for loan.”
Nigeria entered recession last year after 25 years having similar experince. It needs to plug a gap in its record N7.3 trillion 2017 budget to stimulate the economy.
It had planned to apply for a World Bank loan last year, but the process ground to a halt because a World Bank source said it failed to submit its economic recovery plans by the end of December as initially promised. The African Development Bank (AfDB) has been holding back the second, ($400 million), tranche of a $1 billion loan while awaiting a reform plan from the government.
Nigeria will present its economic proposals to the AfDB at the same time as the World Bank, government officials recently said.
The Federal Government had on Tuesday said that the oversubscription of its recent eurobond by almost eight-fold (orders in excess of $7.8 billion compared to a pre-issuance target of $1 billion) showed the world’s strong appetite for Nigeria and that it was evidence the country will be out of recession soon. This is coming even as government is planning to launch another savings bond. Meanwhile, the Budget Minister said that the peace in the Niger Delta is helping governments’ revenue inflow.
He said: “Because of the funding constraints, the budget has a deficit, I travelled with the Minister of Finance and CBN Governor to market our eurobond. As you can see, the eurobond was oversubscribed by over eight times, so the funds are coming in. There is more stability in the Niger Delta, so more monies are coming in.”
Udoma also said the council yesterday spent hours fine-tuning the Economy Recovery Growth Plan. He also said the council had extension discussion on the plan. According to him, the growth plan is still being fine-tuned. “But a lot of inputs were made by council members and it is virtually ready for the President to launch. However, we are doing some fine-tuning and during this period we also do some final consultation before the president launches the plan,” he said.
He said the plan, when approved, is expected to drive economic recovery and lay the foundation for longer term growth as well as improve the competitiveness of the Nigerian economy.
Udoma said: “The goal of the plan is to have an economy with low inflation, stable exchange rate and a diversified inclusive and sustaining growth. The proposed initiatives outlined in the plan are designed to address the country’s poor competitiveness, improve business environment and attract investment and infrastructure, especially power, roads, rails and ports.”
He said that jobs and social inclusion were also key focus areas of the plan.
Udoma gave the immediate execution priorities of the plans as agriculture and food security; energy-particularly power and petroleum product sufficiency; industrialisation- focusing on small and medium size enterprising; transportation, which is very important as an infrastructure requirement to get the economy really moving; and stabilisation of the micro-economy environment.
The minister also said the council spent a lot of time looking at implementation, adding that one of the means of ensuring implementation was to have a delivery unit which, he said, would be in the Presidency.
He gave the key principles of the plan as tackling constraints to growth; leveraging the power of the private sector – this is very important and this is why we have been having extensive consultations and discussions with the private sector; promoting national cohesion and social inclusion; allowing market to function; approving the core value for which this country stands.
Udoma, however, insisted that the plan was still being fine-tuned. He said, “reviews are being incorporated and at a date to be announced soon, the president will launch the plan. Let me add that there will be additional consultations that we agreed in cabinet that we will be making and one of the people we will be consulting will be labour before the plan is finalised.”