Nigerian Economy Not In Danger – FG

Nigerian Economy Not In Danger – FG

The Federal Government has faulted claims that the country’s economy is on the brink of collapse.

It said that despite the global economic uncertainties, the country’s economic outlook still remained positive.

The Minister of Finance, Dr. Ngozi Okonjo-Iweala, who made the position known in a statement issued on Wednesday, also picked holes in some of the specific issues raised by critics regarding the composition of the external reserves and purported discrepancies in the account balances reported by the Ministry of Finance and the Central Bank of Nigeria.

The Action Congress of Nigeria had on Sunday raised the alarm that the nation’s economy was gradually grinding to a halt.

It had warned in a statement by its National Publicity Secretary, Alhaji Lai Mohammed, that if the trend was not urgently halted, the Federal Government might in the next few years be unable to pay its bills, including workers’ salaries.

But Okonjo-Iweala, in a statement issued by her Senior Special Assistant on Communication, Mr. Paul Nwabuikwu, said rather than talk down on the economy, all efforts should be geared towards supporting the reform programmes of the government.

She said, “First, the Nigerian economy is strong. Our economic performance is robust when viewed against a whole range of objective factors.

“Inflation is now down to single-digit at nine per cent in January 2013 compared with 12.6 per cent in January 2012.

“The exchange rate has been relatively stable and the fiscal deficit, at just under two per cent of Gross Domestic Product, is on a downward trajectory and below our threshold of three per cent of GDP.

“Our national debt is at a sustainable level at about 19.4 per cent of GDP. Overall, GDP growth for 2012 was 6.5 per cent and projected at 6.75 per cent for 2013, compared with the projected global growth of 3.5 per cent.”

The minister also said, “The above facts have been independently noted and validated by international ratings agencies such as Fitch, Standard & Poor’s and Moody’s, which have upgraded the country’s economic outlook, even as other countries are being downgraded.

“In addition, Nigeria’s bonds have recently been included in the Barclays and JP Morgan Emerging Market indices.”

While acknowledging the socio-economic challenges being faced by the country, the Okonjo-Iweala said strategies had been put in place to cushion any economic threat.

She said, “We need to create more jobs for our youths to curb unemployment. Poverty needs to decrease at a faster pace, as we do not want excessive inequality to be a feature of our economic growth.

“For example, the recent poverty statistics released by the National Bureau of Statistics show a slight decline in poverty levels of about two per cent between 2003 and 2010.”

The minister stressed the need to accelerate the poverty eradication programme, just as she said the government was taking steps to bring down the current high cost of governance.

“We have reduced the share of recurrent expenditures in the budget from 74 per cent in 2011 to 71 per cent in 2012, and to 68 per cent in 2013. We aim to push for a 60 per cent recurrent and 40 per cent capital budget ratio in the medium term,” she said.

On inconsistent account balances of the CBN and her ministry, the minister said, “It is worth noting that the Ministry of Finance typically reports its balances following Federal Accounts Allocation Committee meetings, which often take place at the middle of the month, whereas the CBN data is reported at the end of each month.

“There is, thus, a time lag between the reports from the two institutions. As a result, there are usually some differences due to ‘transit items,’ which are yet to be reconciled in both accounts. In addition, for quite a while, the CBN’s excess crude reports have included the $1bn allocated to the Sovereign Wealth Fund as this is still domiciled with the CBN, whereas the Ministry of Finance does not regard it as part of the distributable Excess Crude Account.”

She said the government would continue to make every effort to respond to demands for greater transparency in the management of the nation’s resources.

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