Senate summons Emefiele, Adeosun

THE Senate, yesterday, summoned the Minister of Finance, Mrs. Kemi Adeosun and the Gover­nor of the Central Bank of Nigeria (CBN), Godwin Emefiele, to brief it on the monetary and fiscal policies put in place to rescue the nation from

its precarious economic situation.

The apex bank on Tuesday raised the alarm after its Monetary Policy Committee (MPC) meet­ing that the country was on the brink of economic recession due to the late passage of the 2016 budget which made the country to suffer two successive negative quarters.

Adopting a motion sponsored by the Chair­man of the Senate Com­mittee on Gas, Bassey Albert Akpan (PDP, Akwa Ibom), the Upper Legisla­tive Chamber, expressed concern about revelations from several Ministries, Departments and Agen­cies (MDAs) regarding the gloomy picture of events in the Nigerian economy.

The Senate particularly noted that the National Bureau of Statistics (NBS), last week, released the nation’s economic scorecard for the first quarter of 2016 for Gross Domestic Product (GDP), inflation and unemploy­ment. It stressed that the report depicted that the nation’s economy was nosediving into recession with a decline of 0.36 per cent year-on-year in real terms, which was a drastic drop from 2.11 per cent in Q4 2015 in GDP.

“From the report, un­employment rate rose to 12.1 per cent in Q1, 2016 from 10.4 per cent in Q4, 2015. Underemployment also increased to 19.1 per 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 the at­tendant increase in prices of basic food commodi­ties and services in the country.

“The declining Gross Domestic Product (GDP) and unemployment, besides the current high inflation rate, clearly show that the economic policies are not achieving desired impact and requires an urgent review to avoid further plunge in our economy,” he said.

He reminded his col­leagues that the CBN had in March, 2016, deployed a contracting monetary policy by increasing the benchmark interest rate from 11 per cent to 12 per cent and cash reserve ratio from 20 per cent to 22.5 per cent, adding that the question was why con­tracting monetary policy instead of expansionary monetary policy of boost­ing economic activities at such a critical time as this.

He described as wor­risome, the continued complacency at the current state of the na­tion’s economy, which if unchecked, would set the tone for a full blown economic recession by the end of June 2016.

According to the lawmaker, the current economic situation in the country coupled with lack of required foreign ex­change to boost imports of raw materials for domestic industries will worsen the unemployment and poverty situation in the country.

He added that the decline in oil production in the Niger Delta by 800,000 barrels per day, vis-a-vis the benchmark production for 2016 bud­get of 2.2 million barrel per day, owing to the van­dalisation of oil pipelines in addition to the inability of non-oil revenue col­lecting agencies to meet our revenue targets to the economic crunch was a source of concern.

Bassey explained that with the current economic slump, the hope of meet­ing the key budgetary revenue projections of the 2016 budget was practi­cally impossible, stressing that the current economic contraction was the first major drastic slump since June, 2004, which accord­ing to CBN is a 12-year low.

Source: The Sun