Economic recession: Senate summons Adeosun and Emefiele

Economic recession: Senate summons Adeosun and Emefiele By Augustine Osayande Senate has invited the Minister of Finance, Kemi Adeosun and the Governor of Central Bank of Nigeria, Godwin Emefiele to brief it on monetary and fiscal policies so far adopted to salvage the current slide in the nation’s economy. A motion to this effect, which came under urgent need to address the present economic state of the nation, was moved by Senator Bassey Albert Akpan (Akwa-Ibom North-East). “With the current economic slump, meeting the key budgetary revenue projections of the 2016 budget is practically impossible and the need to have a rethink to avoid deepening budget deficit or poor budget implementation. “Unemployment also increased from 18.7 to 19.1 while rate of inflation rose from 9.6 percent in January 2016 to 13.8 percent in April 2016 with attendant increase in price of basic food commodities and service in the country,” a worried Senator Bassey said. The National Bureau of Statistics (NBS) had last week released damning figures depicting that the nation’s economy might have plunged into recession in the first year of President Muhammadu Buhari’s administration as Gross Domestic product (GDP) declined to 0.36 per cent. According to NBS figures, the GDP of -0.36 recorded in the first quarter of 2016 was lower by 2.47 percentage points from the growth recorded in the preceding quarter and also lower by 4.32 percentage points from the growth recorded in the corresponding quarter of 2015. World Bank records show that the last time Nigeria recorded such a negative growth rate in GDP was in 1995 when it had a GDP grew by -0.3 per cent. The lawmaker said that the declining GDP and unemployment number clearly show that the economic policies of the government are not achieving desired impact and they require an urgent review to avoid further plunge in the country economy. “The current economic contraction is the first major drastic slump since June 2004 which according to CBN is a 12 year-low, while the World Bank’s position is a 21-year-low” Akpan added. He queried CBN’s use of contracting monetary policy instead of expansionary monetary policy to boost economic activities at this critical time. Senator Akpan warned that the continued complacency of the current state of the country economy if allowed unchecked, will set the tone for a full blown economic recession by the end of June 2016. “Disturbed that the current economic situation in the country coupled with lack of required foreign exchange to boost imports of raw materials for our domestic industries will worsen the unemployment and poverty situation in the country” Akpan said, while referring to the alarm sounded by the CBN during the last Monetary Policy Committee (MPC) meeting. He also expressed concern on the inability of non-oil revenue collecting agencies to meet their revenue targets due to the economic crunch and decline in oil production in the Niger Delta by 800,000 barrel per day as against the benchmark of 2.2 million barrel per day for the 2016 budget due to vandalisation of oil pipelines. In seconding the motion, Senator Biodun Olujimi (Ekiti South) said it is very clear that the nation lacks clear policy direction which has resulted in the current economic situation in the country. She expressed hope that the Minister of Finance and the Governor of Central Bank of Nigerian would come with a clear economic policy during their meeting with the Senators. In his reaction, the Senate President, Bukola Saraki urged the lawmakers to reserve their comments in order not to pre-empt the positions the Minister of Finance and Governor of Central Bank of Nigeria would express when they appear before the Senate.I