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Economic Recession: Senate Summons CBN Governor, Finance Minister

By Henry Umoru/ Joseph Erunke
ABUJA- WORRIED by the present economic state of the country, the Senate has summoned the Minister of Finance, Mrs. Kemi Adeosun and the governor of Central Bank of Nigeria, CBN, Mr. Godwin Emefiele to appear before it and brief the upper chambers on the Monetary and fiscal policies adopted to salvage the current economic situation.

According to the Senate, the summoning of both the CBN governor and the Finance Minister has become imperative following last week’s report on the nation’s economic scorecard for the first quarter of the year 2016 for Gross Domestic Product, GDP by the National Bureau of Statistics, NBS on the inflation and unemployment levels.

The position of the Senate Wednesday was sequel to a motion by Senator Bassey Albert Akpan, PDP, Akwa Ibom North-East and titled, “An urgent need to address the present economic state of the nation”

Earlier in his presentation, Senator Akpan said, “Aware that the National Bureau of Statistics, NBS last week released the nation’s economic scorecard for the first quarter of the year 2016 for Gross Domestic Product(GDP), Inflation and Unemployment;

“Observes that the report depicts that the nation’s economy plunged into recession with a decline of 0.36 percent year -on-year in real terms which is a drastic drop from 2.11 percent in Q4 2015 in GDP;

“Further Observes that from the report, unemployment rate rose to 12.1 percent in Q1 2016 from 10.4 percent in Q42015. Under employment also increased to 19.1 percent from 18.7 percent in the same period while the rate of inflation rose from 9.6 percent in January 2016 to 13.8 percent in April 2016 with the attendance increase in prices of basic food commodities and services in the country;

“Worried that the declining Gross Domestic Product, GDP and unemployment besides the current high inflation rate clearly shows that the economic policies are not achieving desired impact and requires an urgent review to avoid further plunge in our economy;

“Further worried that the current economic contraction is the first major drastic slump since June,2004, which according to the Central Bank of Nigeria is a 12-year-low, while the World Bank’s position is a 21-year-low;

“Recalls that the Central Bank of Nigeria had in March, 2016 deployed a contracting monetary policy increasing benchmark interest rate from 11 percent to 12 percent and cash reserve ratio from 20 percent to 22.5 percent. The question is: why contracting monetary policy instead of expansionary monetary policy of boosting economic activities at such a critical time as this;

“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 2016 as already confirmed by the Central Bank of Nigeria in her Monetary Policy Committee(MPC) meeting of yesterday(Tuesday);

“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;
“Considering the decline in oil production in the Niger Delta by 800,000 b/d viz a vis the benchmark production for 2016 budget of 2.2mb/d, owing to the vandalization of oil pipelines, in addition to the inability of non-oil revenue collecting agencies to meet our revenue targets owing to the economic crunch;

” Convinced that 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.”

Supporting the motion, Senator Biodun Olujimi, PDP, Ekiti South noted that it was clear that there was no fiscal Economic policy in the country at the moment, adding that while the CBN governor and the Minister of Finance appear before the Senate, they should come with President Muhammadu Buhari’s economic blueprint.

In the course of her speech, there were shouts apparently from some Senators of the All Progressives Congress, APC, but she continued.

A rowdy session was however averted by Senate President Bukola Saraki when he did not call for discussions from the Senators on the motion.


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