Buhari finally rolls out 4 Economic blueprints

By Joshua Amaugo April 11, 2016 14:00

Buhari finally rolls out 4 Economic blueprints

Nigeria’s economy for the last 10 months has been under intense economic shocks, especially with the fall in global oil prices, which has affected Government revenues and reserves.

Inflation has been on the rise from 7.4 percent to 11.4 percent according to the National Bureau of Statistics, NBS.

According to NBS, over 2 million Nigerians have been reported to have lost their jobs under the President Muhammadu Buhari-led government, while the Nigeria Stock Exchange, NSE, and the Exchange rate market have recorded an all time low.

Amidst fuel scarcity which has practically crippled the nation’s economic activities, the Financial Derivatives Company Limited, FDC, has predicted that inflation might likely cross the 12 percent threshold in 2016.

Precisely, the firm projected a significant increase of 0.7 percent in the March inflation number to 12.1 percent.

FDC speaking further said, “The factors that are contributing to the spike in inflation include, seasonality, cost push factors, money supply and forex shortage. These factors while transient in nature are becoming more permanent.

“As these factors grow increasingly embedded, they are making consumers panic. Anticipated inflation is more important, because of the pass through effect of increased demand and expectations of higher prices on current prices,” the FDC said.

With the situation out of hand, President Buhari through the Minister of Finance, Kemi Adeosun, during the weekend called on Nigerians to be patients with the government as plans are being made to reset Nigeria’s economy with structured borrowing, targeted investment and diversified growth.

She said, “We must collectively adopt a blueprint that equips the future generations to be creative and dynamic, that allows us to articulate a vision of a Nigeria, with a strong educational foundation; rich in depth of knowledge with a breadth of skills, an expansive infrastructure capable of servicing the needs of a nation of 150 million Nigerians.

Speaking on the N1.8 trillion the federal government proposes to borrow to invest in railway transportation, roads, housing, power and health, the minister said, “We are committed to a countercyclical budget expenditure model. This has been a success in other nations, offsetting the risk of recession and creating an economy which is not based on either fragile consumer spending or over-reliance on oil.”

Outlining Buhari’s economic blueprint, she said, “The economic plan includes: stimulate economic growth to achieve a real GDP growth of 4.2 per cent in 2017; reduce the cost of governance and strengthen institutions to combat corruption and extract efficiencies in public service; increase government expenditure on infrastructure; and fund the budget deficit and negative trade balance cost effectively.”

Presently, Nigeria produced a total of 66.49 million barrels (mb) of crude oil for the month of January 2016, representing an average daily production of 2.14 million barrels per day.

However, there has not been a consistent depletion to the external reserves, because of the consistent fall in oil price, which has made it difficult for the apex bank to continue to defend the value of the naira.