The Minister of Finance,
Mrs. Kemi Adeosun, has admitted that Nigeria’s economy is in recession .She
made this disclosure while briefing the Senate yesterday on the state of the
nation’s economy, was however emphatic that the recession was technical and
would be short-lived.
Buttressing
the point, her counterpart in the Ministry of Budget and National Planning,
Senator Udoma Udo Udoma, who briefed State House correspondents after the 69th
meeting of the National Economic Council (NEC), said the economy was
“technically in recession”, adding however that it would start to grow by the
end of the third quarter of 2016.
The
recession, notwithstanding, Adeosun was confident that Nigeria would come out
stronger in view of the policies and programmes that the government had put in
place to address the downturn.
She
also confirmed that fuel subsidies had been totally eliminated, adding that the
petroleum products in the country were now market-driven, as the subsidy
removal by the government had paved the way for healthy competition among oil
marketers.
“Is
Nigeria in recession? Technically, if you go into two quarters of negative
growth. Technically, we are in recession but I don’t think we should dwell on
definitions. I think we should really dwell on where we are going.
“I
think if we are in a recession, what I will like to say is we are going to come
out of it and it will be a very short one because the policies that we have
will ensure that we don’t go below where we need to go and I think with what we
are doing, we will begin to turn the corner by the third quarter.
“I
can confirm there is no more subsidy. It is a market-driven price and indeed,
one of the good things that we are now seeing is that prices have actually been
coming down.
“There
is now competition between filling stations for market share which is a good
thing, which means overtime, the market will continue to correct itself,” she
said.
Adeosun
also disclosed that Nigerians, before the removal of the subsidy, consumed 45
million litres of petrol a day, but consumption has now dropped to 26 million
litres a day, a situation she said had provided the platform for the government
to make reasonable savings.
“If
you look at what is happening in the petroleum sector before the subsidy
removal, we were subsidising around 45 million litres of fuel a day.
“Now,
without subsidy, usage has dropped to 26 million litres. So what does that tell
you? All the smuggling that was going out of the country based on the subsidy
that we were providing has stopped. Those are real savings to the economy which
we are now redirecting into essential infrastructure that will get this economy
going,” she explained.
The
minister also told the senators to ignore the recent projections from the
International Monetary Fund (IMF) that the Nigerian economy would be vulnerable
to global shocks.
According
to her, IMF projections were not necessarily in tandem with reality, insisting
that she remained confident in the potential of the Nigerian economy to weather
the current economic crisis.
“I
am not too worried about IMF projections. I will tell you why: The IMF, one of
its functions is global economic surveillance. They equally issued a negative
report on Britain as a result of Brexit.
“But
I don’t think we should panic every time IMF speaks. I think we need to be
confident about what we are doing and where we are going. I remain extremely
confident as I said.
“IMF
has given its projections which is that we may continue to go into negative
territory and I am not sure what we have seen suggests that.
“Agricultural
output seems to be going up… That tells you that things are moving in the right
direction,” she said.
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