The Nigerian economy might be in much worse shape than we thought. Following a closed door meeting between Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele and the Senate yesterday, a clearer picture of what the future holds in store for the economy was painted and it doesn’t look too good.
Below is a full report by Vanguard.
The Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, yesterday, painted a gloomy picture of the economy during a closed-door meeting with senators.
Vanguard gathered that the CBN governor told the senators that it was frightening that the nation was experiencing economic stagnation and inflation at the same time, explaining that ordinarily, both were not supposed to happen simultaneously.
A source said he expressed concern that the economy was gloomy, stagnant and worsening as a result.
According to the source, Emefiele, who noted that the economy was biting on all, with almost all activities crippled, said indices that would have made the economy grow were not in place at the moment.
He was also said to have made reference to the renewed bombing of pipelines by Niger Delta Avengers as one of the factors pulling down the economy.
The CBN governor was said to have linked these occurrences, especially with respect to the over 70 per cent decline in oil prices from about S116 per barrel in June 2014 to about $30 per barrel earlier in the year.
FG may not be able to pay workers’ salaries
Vanguard further gathered that the CBN governor told the lawmakers that if the present situation in the country continued, the Federal Government might not be able to pay salaries of its workers with effect from October this year. He also said Nigerians would be forced to pay general taxes which would not exclude petroleum products.
Emefiele, who was with the senators for an hour, was said to have presented a comprehensive account of the economy in the last one year which, according to him, had been characterised by external shocks, including sharp decline in commodity prices, geo-political tensions along important global trading routes and tightening monetary policy in the United States.
Senate backs CBN’s policies
The Senate was, however, said to have expressed sympathy with the CBN governor because of the depth of the economic problems which, it noted, had global influence, and threw its weight behind new policies introduced by the CBN to turn the economy around.
It backed the monetary policies of the CBN, noting that at the end of the day, such policies would help to increase local production, create jobs in the country, safeguard the nation’s commonwealth as well as expand economic opportunities and growth in Nigeria.
The Senate in a statement after the executive session, however, stressed the need for all to put hands together to seek long term solutions to the nation’s underlying problem of non-diversification of foreign exchange earning and revenues, rather than pointing fingers or apportioning blames.
The statement read: “After the presentation, many distinguished senators asked a host of pertinent questions and raised issues concerning the banking system, the slippage in economic growth for the first quarter of 2016, the gradual rise in inflation, fall in foreign exchange reserves, and policy coordination between the fiscal and monetary authorities.
“Following an exhaustive response by both the governor and his team, the Senate acknowledged that these are, indeed, difficult times all over the world and not just in Nigeria.
“The Senate also acknowledged the pains that many people may be facing at this time, especially in the light of increases in price of electricity and fuels. But having carefully considered the policies of the CBN, the Senate would Iike to commend and support these policies because they are mostly geared towards increasing local production, creating jobs here in Nigeria, safeguarding our commonweaith, and expanding economic opportunities and growth in Nigeria.
“It is critical that we all put hands together to seek long term solutions to our underlying problem of non-diversification of foreign exchange earning and revenues, rather than pointing fingers or apportioning blames.
“The Senate believes strongly in the resilience of the Nigerian economy and the ingenuity of the Nigerian people and as such, we are confident that we will all puII through these difficulties and come out as a much better, equitable, and prosperous nation.”
Finance Minister to appear today
Briefing journalists after the meeting, Deputy Chairman, Senate Committee on Media and Public Affairs, Senator Ben Murray-Bruce, said the Minister of Finance, Kemi Adeosun, would today appear before the Senate to brief it on the state of the economy and issues relating to the implementation of 2016 budget.
Asked why the meeting with the CBN governor was held behind closed doors, Senator Bruce explained that it became imperative to hold the meeting in an exclusive manner because some economic matters could be explosive, if held in the open.
Written by Olufunke Edidi
Leave your views in comments box below.