Wednesday, July 20,
2016
CBN briefs Senate on
economy
From the International
Monetary Fund (IMF) has come the not-so-cheery news that Britain's exit from
the European Union (EU) would have negative impact on some nations including
Nigeria.
Accordingly, the IMF
has projected that Nigeria's economy is to shrink by -4.1 per cent growth this
year, down from the earlier projection of 2.7 per cent, to berth at a negative
growth rate average of -1.8 per cent.
Effectively, what the
current updated global economic growth rate outlook released yesterday means is
that Nigeria's economy will be in full recession this year.
According to the IMF,
which is the global economic policy advisory establishment, the new outlook
also cuts Nigeria's 2017 growth projection from the earlier 1.1 per cent to
-2.4 per cent.
The new economic
outlook is against the backdrop of the risk of the recent exit from the European
Union by Britain.
Concerning the
sub-Saharan African commodities-reliant countries, the IMF said: "The
outlook for other emerging and developing economies remains diverse and broadly
unchanged relative to April. That said, gains in the emerging group are matched
by losses in low-income economies. Indeed, low-income countries saw a large
downward revision in 2016, in large part driven by the economic contraction in
Nigeria and also worsened outlook in South Africa, Angola and Gabon. "
On Monday, Nigeria's
National Bureau of Statistics (NBS) released the June 2016 figures which
revealed that the country recorded another negative growth result with
inflation moving from 15.6 per cent the previous month to an 11-year high of
16.5 per cent, the increase being the fifth in the current fiscal year.
Meanwhile, there are
fresh revelations that from the third quarter of last year, the Federal
Government's budgetary capital spending had declined, the worst in four years
spanning 2012 to last year.
The consolidated 2015
Federal Government Budget Implementation Report just released by the Federal
Ministry of Budget and National Planning revealed that both provisional
allocation and implementation levels have dropped from a height of N1.004
trillion capital votes releases and actual implementation of N968.93 billion
recorded in 2013 to just N387.39 billion releases with no information on the
amount of cash backing or actual implementation in the 2015 fiscal plan out of
the N557 billion provision for the year.
In the 2012 fiscal
plan, N1.017 trillion out of the N1.339 trillion projected for capital budget
implementation for the year was released to MDAs out of which N739.3 billion
(or 72.66 per cent) was cash-backed while N686.3 billion (or 92.83 per cent) of
the cash-backed sum was utilized by the government agencies.
In the same vein, in
the 2014 plan, records indicate that N501.79 billion out of the N1.119 trillion
projected for capital budget implementation for the year was released to MDAs.
The sum of N501.72 billion (or 99.99 per cent) of the released amount was
cash-backed while N490.92 billion (or 97.85 per cent) of the cash-backed sum
was utilised as at the end of December 2014.
In a related
development, the Central Bank of Nigeria (CBN) has briefed the Senate on
critical issues in the economy.
At a closed-door
session that lasted two hours, the governor of the apex bank, Godwin Emefiele,
was said to have told the senators that steps were being taken to address the
dwindling fortunes of the economy.
It was gathered that
issues relating to increased taxation and tightening loose ends in the economy
were canvassed.
Briefing journalists on
the issues raised at the closed-door session, the Vice Chairman, Senate
Committee on Media and Public Affairs, Ben Murray-Bruce, said the Finance
Minister, Kemi Adeosun, would have to answer questions on issues raised by the
CBN.
On the likely solution
to the economic problem, he said: "For us to get out of this mess we have
found ourselves in, we need to start buying Nigerian products and we need to
stop importing products. We are in a mess already and everybody is part of it.
But to solve this problem, we need to buy Nigerian products."
When the lawmakers
resumed plenary session, Senate President, Bukola Saraki, said: "The
Senate, in a closed-door session with the CBN governor deliberated on the new
foreign exchange, management policy and the determination of foreign exchange
market by demand and supply mechanism. The need to continue to grow the
economy, focus and diversification of the economy and issues relating to some
of the commercial banks."
SOURCE: THE GUARDIAN