Summons finance minister, CBN gov
By Ezrel Tabiowo and Taiye Odewale, Abuja
Disturbed by the present economic state of the nation with indices of imminent recession, the Senate yesterday summoned the Minister of Finance, Mrs. Kemi Adeosun, and Governor of Central Bank of Nigeria (CBN), Godwin Emefiele, to brief it on the monetary and fiscal policies being adopted by government to salvage the situation.
The upper legislative chamber was worried that the economic policies of President Muhammadu Buhari within the last one year, were not achieving the desired impacts and stressed the need for an urgent review, to avoid further plunge into full blown recession.
The CBN governor, shortly after the meeting of the bank’s Monetary Policy Committee on Tuesday, alerted the nation that its economy was at the verge of collapsing following the continued stress it’s been contending with in recent times.
It said many Deposit Money Banks are likely to go distressed if nothing was done to assuage the current liquidity stress in the sector.
“The overall macroeconomic environment remained fragile. The economy further slowed in the second quarter of the year, making it the second consecutive quarterly less-than-expected performance.
“Having seen two consecutive quarters of slow growth, the committee recognised that the economy could slip into recession in 2016 if proactive steps were not taken to revive growth in key sectors of the economy,” Emefiele declared.
Expressing concern over the apex’s bank position on the economy, the lawmakers lamented that the nation’s economy does not appear to have a direction.
It specifically observed a decline in crude oil production from the 2016 budget benchmark of 2.2 million barrels per day, to 8, 000b/d and feared that meeting key budgetary revenue projections in the budget “are practically impossible.”
Consequently, the Senate stressed the need to have a rethink in order to avoid deepening budget deficit in the 2016 fiscal year or poor budget implementation.
The resolution which was sequel to a motion moved by Senator Bassey Albert Akpan (PDP, Akwa Ibom North-east) on “an urgent need to address the present economic state of the nation,” was also based on last week report of the National Bureau of Statistics (NBS).
The NBS had, in its score card for the first quarter (January – March) of 2016 for GDP, painted a gloomy picture of rising inflation and unemployment as prelude to total economic recession.
The Senate observed from the report, a decline of 0.36 per cent which is a drastic drop from 2.11 per cent in Q4 2015 in GDP; increased unemployment rate to 12.1 per cent in Q1 2016 from 10.4 per cent in Q4 2015.
The report further disclosed that underemployment also increased to 19.1per cent from 18.7 per cent in the same period, while the rate of inflation rose from 9.6 per cent in January 2016 to 13.8 per cent in April 2016, with attendant increase in prices of basic food commodities and services in the country.
Accordingly, the Senate in the motion, said it felt deeply concerned that “the continued complacency of the current state of our economy if allowed unchecked, will set the tone for a full blown economic recession by the end of June this year, as already confirmed by CBN in her Monetary Policy Committee ( MPC) meeting of Tuesday, this week.”
It added that the current economic contraction is the first major drastic slump since June 2004, which according to the CBN is a 12-year-low, but the World Bank’s position is a 21-year-low.
However, the Senate President, Bukola Saraki, who presided when the motion was moved, did not allow it to be debated but simply called on Senator Abiodun Olujimi (PDP Ekiti South), to second the motion.
In seconding the motion, Olujimi regretted that there is no visible economic policy in Nigeria, which according to her could suggest a clear cut economic direction for now.
She said, for the nation to get a clear economic direction, there must be a workable blueprint to that effect.
But she was quickly cut short by Saraki, who put the question for invitation of the Finance Minister and CBN Governor to voice votes by the senators which majority of them supported by shouting yea!
