Kemi Adeosun, Nigeria’s Finance Minister, acknowledged that the country is in a recession, as the anticipated GDP (gross domestic product) figures for the second quarter are yet to be released. Appearing before the Senate yesterday, Mrs. Adeosun played down the severity of economic climate assuring everyone that the recession will only be short-lived.
“Things are tough, but we are not ignorant, I want to assure Nigerians the economy is in good hands and we are absolutely doing our best. We want to assure Nigeria we are on the right path, we are on the right track,” said Mrs. Adeosun. The former Commissioner of Finance for Ogun State gave this assurance days after the International Monetary Fund cut the country’s GDP growth forecast from 2.3 percent in April to – 1.8 percent, the lowest in 29 years. In the same week, the National Bureau of Statistics revealed an inflation rate for June of 16.5 percent, the highest in over a decade. Adeosun tried to allay the fears arising from the grim figures released this week, insisting that the government had devised strategic measures regarding how public money would be spent and was making efforts to tract strategic investments. She explained that by trimming and redirecting public spending, the economy will get the boost it needs in the near future.
She stated that the cost of salaries has been reduced from N165 billion to N159 billion, and that the capital-recurrent expenditure ratio has been restructured to 30:70 “compared to previously when recurrent expenditure was 90 percent and capital expenditure 10 percent…The objective is to release money for capital expenditure to get the economy going,” the Minister stressed.
Mrs. Adesosun says that she does not expect the recession to carry on in the coming quarters, with the government striving to attract investors and preparing for a bond issue, the statement is expected. Nigeria’s security challenges combined with the sharp fall of the Naira and the drastic fall in the production of oil, which constitutes 70 percent of public revenue, dampens hope of a short-term recovery. However, with robust fundamentals in place, the nation may enjoy a stronger third quarter.
