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| Minister of Budget and National Planning, Senator Udo Udoma |
The Minister of Budget and National Planning, Senator Udo
Udoma, on Thursday said that the country was already moving out of economic
recession.
Udoma stated this in Abuja while inaugurating the Joint
Planning Committee for the 23rd Nigerian Economic Summit.
The summit, to be held in October this year, is the single
largest gathering of economic and financial experts from the private and public
sectors.
The theme of this year’s summit is: ‘Actualising the
Economic Recovery and Growth Plan: Opportunities, productivity and employment’.
However, the Federal Government and the International
Monetary Fund have disagreed over how much the economy will grow this year,
with the government saying 2.2 percent and the Fund opting for just 0.8
percent.
Either will be an improvement on last year, when Nigeria
suffered its first recession in more than two decades as low crude prices and
oil production slashed government revenues and caused chronic dollar shortages.
The government’s forecasts, seen by Reuters on Thursday, are
contained in a document titled: ‘2018-2020 Medium Term Fiscal Framework and
Strategy Paper’ dated July 27, which forms the basis for its 2018 budget.
It projects a big bounce back, to 2.2 per cent this year,
4.8 per cent in 2018 and 4.5 per cent in 2019, before reaching seven per cent
in 2020.
The IMF, however, is not as bullish, saying on Wednesday it
expected the Nigerian economy to grow by 0.8 per cent this year, with threats
to growth remaining elevated.
Udoma said that while national debates in the past had
centred on how the country could get out of recession, such was no longer the
case with the adoption of the ERGP.
He stated that as the country was already on its way out of
recession, the current efforts of the Federal Government were on how to build
the current momentum of the growth trajectory.
This, according to him, has become imperative so as to
ensure that the growth is maintained post-recession with positive impact on the
people.
The minister said, “The 23rd Nigerian Economic Summit is
coming at a time when the national debate is no longer about how to get out of
recession; we are already moving in that direction with the adoption of the
ERGP.
“Focus will, therefore, be on specific sectors such as
infrastructure, manufacturing, renewable energy, housing, agribusiness,
creative industries, retail trade and digitalisation. The summit will
essentially be used to see how we can intensify efforts to implement the ERGP
to create opportunities, tackle unemployment and improve productivity in
Nigeria.”
Udoma added that the summit would be used to get
stakeholders’ commitments toward a private sector led investment approach as
set out in the ERGP.
He explained that the summit would also complement the
Federal Government’s effort to create over 15 million direct jobs by 2020
through agriculture, manufacturing, construction and services, among others.
The Chief Executive Officer, Nigerian Economic Summit Group,
Mr. Laoye Jaiyeola, said the committee would deliver a summit that would meet
all expected outcomes.
He told the minister that the committee will use the summit
to promote and support the actualisation of the ERGP.
Commenting on the growth projection, the Africa economist at
Capital Economics, John Ashbourne, said, “I think that risks are to the
downside rather than the upside, but 2.2 per cent isn’t outside the range of
the possible now that oil prices and oil output are recovering.”
The country expects oil production to hit 2.3 million
barrels per day and a price of $45 per barrel. It said oil production reached
1.9 million barrels between January and June 2017, including condensates.
Nigeria has promised OPEC to cap its crude oil output at 1.8
million bpd, although it does not include condensates in this total.
The country’s economy contracted by 0.5 per cent in the
first quarter, its smallest fall in five quarters of decline.
The government projects the naira’s exchange rate to the
dollar, which has traded at around 305 on the official market since 2016, to
remain stable, while inflation will decline but remain in double-digits at
12.42 per cent next year.
The country has at least six exchange rates, which it has
used to mask pressure on the naira after a drop in oil price caused foreign
investors to flee, triggering a currency crisis.
The Central Bank of Nigeria has been working to converge the
rates through dollar interventions but that is burning out reserves.
“Should there be any harmonisation in FX rates, as
encouraged by the multilateral agencies, then an FX assumption of 305 is likely
to prove unrealistic,” said Razia Khan, chief economist Africa at Standard
Chartered Bank.
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