Abuja – The Minister of Information and Culture, Alhaji Lai Mohammed, has allayed the fears of Nigerians over the National Bureau of Statistic’s data which indicates that the country is on economic recession.
The Minister, on Friday in Abuja, said that the Federal Government is on top
of the situation.
“What I can assure you is that we are on top of the situation and we are confident that the second half of the year will be better than the previous.
“Some of the things that impacted on this first two quarters were the acute fall in the price of crude oil,” he said.
Mohammed said that the development was not new to the government, adding that measures were being taken to reverse the trend.
“One thing we cannot take away from this government is that it is open, honest and will not keep Nigerians in the dark.
“About a month ago, the Minister of Finance actually told all of us that we are already technically in recession.
“Recession is not an event, it is a process. We knew more than five years ago that the country is heading towards recession because the structure of our economy is faulty.
“Faulty in the sense that for many years we have relied in one product, crude oil,” he said.
The minister said the crash in the cost of crude oil and the activities of militants in the Niger Delta region which brought down production were largely responsible for the situation.
He explained that “because of the crash in the cost of crude oil, we lost about 60 per cent of our earnings.
He said: “Crude oil that used to sell for about 100 dollars per barrel, today we are hovering between 40 and 45 dollars per barrel.
“The 2016 budget projected 2.2 million barrels per day at 38 dollars. But because of the activities of the militants in the Niger Delta region, we are down to 1.2 to 1.4 million per barrels a day.
“We have lost about one third of production capacity.
“Combine all these together we are heading for recession especially when there is no reserve to cushion the effects.”
Besides, the minister said the nation’s economy was driven by consumption and not by investment or production.
He therefore appealed to Nigerians to curb their appetite particularly for foreign goods and patronise made-in-Nigeria products.
He said that government on its part would continue to provide incentives to encourage manufacturers and ensure that the cost of doing business is competitive.
Mohammed noted that the NBC report was not all gloomy as the nation recorded growth in agriculture and in the solid minerals sectors.
“Even in the face of the deficit, we made growth in agriculture which records 4.5 per cent growth and solid minerals which records 3.9 per cent growth.
“On the good side again is that we can see in agriculture that we have surplus in agriculture produce and what is of concern to us is how to mop up this.
“The report also indicates that in the area of investments, we are higher even than what it was in 2010,” he said.
The minister explained that the positive side of the report was an indication that the policies and programmes of the government on diversification of the economy were yielding fruits.
He assured that government would continue to encourage agriculture and ensure it purchased and stored the excess produce by farmers.
Mohammed said that the approval by the Federal Executive Council for extension of contract for e-wallet programme, would allow farmers easy access to fertilisers and seeds at subsidised rate.
He explained that inflation being experienced in the country is “cost pushed inflation” but not in a situation where too much money is chasing few goods.
“Cost pushed inflation usually occurs when the cost of doing business increases,” Mohammed said, adding “government is focused and working hard to reposition the economy better.”