Exit From Recession Is Proof Our Fiscal Policies Are Working – Nigerian...

Exit From Recession Is Proof Our Fiscal Policies Are Working – Nigerian Gov’t

By Wires Editor | The Trent on February 24, 2021
Creative Industry, Zainab Ahmed, the Minister of Finance
Zainab Ahmed, the Minister of Finance

The federal government on Wednesday, February 24, 2021, said the country’s recent exit from recession was a direct result of its fiscal policies.

The government insisted that sustained implementation of good fiscal policies, monetary policies, and the economic sustainability plan by President Muhammadu Buhari led to the country’s exit from the recession which it noted was the shortest exit so far.

Zainab Ahmed,  the minister of finance, who briefed State House correspondents, alongside ministers of Information and Culture, Lai Mohamed and FCT, Mohammed Bello, at the end of the Federal Executive Council meeting, presided over by President Muhammadu Buhari, said the quick exit showed that government’s economic diversification efforts were yielding positive outcomes.

The minister explained that the Vice President Yemi Osinbajo-led Economic Sustainability Plan,ESP, approved by council last June was being carefully implemented.

She said: “The Federal Executive Council, we had the opportunity to brief Council on the National Bureau of Statistics recently published fourth quarter GDP report estimates, which measure the economic growth of our country.

“Nigeria’s GDP in the fourth quarter of 2020 grew by 0.11% and in real terms in the fourth quarter of 2020. This follows, if you recall, two consecutive negative growth in the third quarter and the second quarter of 2020, which saw us as a country going into recession.

So as a result of this fourth quarter positive growth, the total growth for the year 2020 is  -1.92%.

“Recall that we had ourselves reported, that we will be going into a negative growth at the end of 2020 at -4% and some of the international development institutions reported much higher negative growth for Nigeria. So at -1.92%, it is a very good performance.

“But also, the good story for us is that, with this positive growth in the fourth quarter it means Nigeria has exited recession.

This is one of the shortest-lived recessions we have witnessed in the country, despite the impact of the COVID-19, but I must say that the result of this exit is as a result of the fiscal policies, the monetary policies, and the Economic Sustainability Plan that the administration of President Muhammadu Buhari has been implementing.

“So out of the 46 sectors of the economy, 17 recorded positive growth and this is higher than the number of sectors that had recorded positive growth in the third quarter.

In real terms, the growth between the third quarter and the fourth quarter is a positive growth of 3.73%, a movement within one quarter we have never witnessed in this country, so we’re growing from one quarter to another by 3.73%.

“That also the movement from the second quarter to the third quarter also witnessed a growth of 2.48% is an indication that the policies that are being implemented are the right ones and the trajectory is a positive one and that Nigeria is well on its way of restoring a consistent and stable growth, a growth that we hope to grow to be a strong growth from the fragile growth that we now have at 0.11%.

“So this is a good performance, but on a broad sectoral basis, the Agricultural Sector posted a strong growth of 3.42% during the last quarter and when you compare to the previous quarter, it’s a much better performance.

“Similarly, Services Sector grew. Other sectors that witnessed slow down in growth include Industry, crude, petroleum, and natural gas sectors. The decline in oil production and prices in 2020, of course reflective of global drop in demand,  and it is one of the major reasons why our country went into recession.

“Another positive story for us is that the non-oil sector grew by 1.69%. This is an indication that the diversification efforts that the economy has been pushing is actually also posting results; while the oil sector is declining, the non-oil sector is growing.

“We’ve seen overall economic activities reported strongly in the quarry and minerals sector, in the ICT and Telecommunications sector, in the cement industry, in broadcasting, in crop production as well as in agriculture.

“On the other hand, there are some sectors that are still witnessing negative and that’s why I said the growth is still fragile. These sectors include oil refining, air transport, coal mining, crude petroleum production, as well as accommodation and food services.

“Just of note is that we had vigorously implemented the Economic Sustainability Plan and we continue to implement the ESP. Even as we are taking the principles and the tenets of the ESC into the new National Development Plan that will be completed, we hope in the Medium Term Plan that we hope will be completed and launched in the month of April.”

In another development, the Federal Executive Council approved N5.9 billion for three projects under the Ministry of the Federal Capital Territory, FCT.

Minister of the Federal Capital Territory, FCT, Mohammed Bello, explained that three memos were on the provision of infrastructure in the city as well as the purchase of needed equipment to make the city safe.

He said: “During today’s Federal Executive Council meeting, I presented three memos, two of which were on infrastructure and the other was for the purchase of needed equipment to make the city safe.

The first was for a contract to rehabilitate the road leading to the Federal Integrated Staff Housing Estate in Apo, Abuja, and that contract was approved at the sum of N2.3 billion with a completion period of 24 months.

“As you know, the Federal Integrated Staff Housing Estates are being constructed in some locations in Abuja under the office of the Head of civil Service of the Federation, and these estates are intended to provide needed accommodation to federal civil servants.

“The second infrastructure project relates to the contract for the construction of an access road and car park for the Abuja light rail station at ring road II otherwise known as Kukwaba station, which you see on the airport expressway immediately after the city gate near the Kukwaba recreation park under the Ministry of Aviation. The contract was approved for N3.6 billion, with a completion period of 18 months.

“The intention is that by the opening of that road, that railway station can be made functional, and then commuters can use the station either when they visit the national park there or they want to have access to the Kukwaba district.”

The FCT Minister said that the third contact approved for his ministry was that of the purchase of two towing vehicles and a crane for use by the Directorate of Road Traffic Services at the sum of N3.072 million.

“The third is for the purchase of two heavy duty tow vehicles with mounted crane for the Directorate of Road Traffic Services otherwise called Vehicle Inspection Officers, VIO, under the FCT and that particular contract was approved at a total sum of N3,072,466,000 with a duration period for the supply put at six weeks,” he said.

Osagie Ehanire, the minister of health, on his part said council approved the two memos, both of in Favour of  the National Agency for Food and Drug Administration and Control, NAFDAC.

He said: “Both memos are procurement memos to upgrade and scale up the capacity of NAFDAC to be able to detect fake and substandard drugs and other materials. NAFDAC, as you know, is responsible for regulating medicines, drugs, cosmetics, and other products made in Nigeria or important.

“The first memo was about 40 through scan devices, which are mobile scan devices to be able to recognise fake and substandard drugs brought in either across the border or found within the country.

“These are like rapid diagnostic kits tests, which also relieve the laboratories because normally you have to take samples to the laboratories, it takes a long time, several days and lead to some delays. So having a through scan allows us to have faster access.

“The second memo is about laboratory strengthening, improving, and upgrading all of our six laboratories for NAFDAC for testing materials that are brought into the country.

“Both of these contribute strongly to what we call the benchmarks for NAFDAC to be able to allow the manufacture of vaccines in Nigeria. It needs what we call the maturity level 3 of the World Health Organisation, to be able to start manufacturing, we have ambitions to start manufacturing vaccines and the federal government owns 49% of shares in the company called BioVaccines that hopes to use technology imported from outside to make vaccines and getting this benchmark maturity level 3 is a condition for it.

“So both of these memos, the upscaling of laboratory capacity and the ability to speed up and make diagnostics more accurate in respective of fake and substandard drugs, will help us to push to apply for maturity level 3 for the health sector.”

Source: Vanguard


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