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Nigeria: FG to Pump N400bn Into Economy
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Leadership (Abuja)
13 May 2008
Posted to the web 13 May 2008
Golu Timothy
Abuja
The Federal Government is to pump in a whooping N400 billion into the economy in the next few days as a way of achieving a double-digit gross domestic product growth level for the economy. The sum is part of the excess crude earning.
Also, the government has projected a double digit growth in Gross Domestic Production as a means of reducing poverty by 30% and creating 10 million new jobs by 2011.
The double digit growth, according to the government, is mandatory for the achievement of Vision 2020.
According to the minister of state, finance, Mr. Remi Babalola, who spoke at the opening of the inter-ministerial retreat on harmonisation of NEEDS 2008-2011 and the seven- point agenda, said the money is the difference between the $59 per litre for 2008 budget and the $53 per litre for 2007.
Before the passing of the 2008 budget the government had based the monthly federal allocation on the 2007 budget as approved by the constitution. Hence with the passing of the 2008 budget, it was learnt that the governors had called for the sharing of the difference, which was said to be in the region of N400 billion, starting from January, 2008.
Babalola warned that sharing the huge amount might endanger the economy.
His fear is that injecting the unbudgeted money into the economy might make nonsense of any monetary policy of the government.
According to him, "N400 billion of excess crude unbudgeted money is ready to be pumped into the economy in the next few days. For us to keep the unstoppable momentum in our economic growth, we need to control the injection of the money to avoid inflation. We don't need IMF to tell us that we are doing well."
He also warned that if the governors who are becoming more powerful day-by day "are not prudent in spending, we are going to lose all the substantial gains we have made so far."
In his remarks, Vice President Goodluck Jonathan, who is also the c hairman of the National Planning Commission, said as contained in the macro-economic framework, a double digit Gross Domestic Product growth level is mandatory to achieve the economic goal of the administration's Vision 2020.
"As encapsulated in the macro-economic framework, a double digit GDP growth level is mandatory for attaining our national goal of reducing poverty by 30 per cent and creating 10 million new jobs by 2011. It is also important to stress that a double digit growth rate is also mandatory for Nigeria to achieve her vision 2020 goal.
"The implication is that sectoral growth rates, particularly the non-oil sector, must be doubled during the plan period. For this to happen, it is imperative that in the next four years, the strategies to be adopted are well articulated, focused, coherent, consistent and achievable."
He warned that the country has no reason not to achieve the Millennium Development Goals (MDGs).
In his remark, Mr. Sanusi Daggash, minister of national planning, said the retreat is one of the key activities in the roadmap for harmonising draft NEEDS 2 and the seven-point agenda towards having a medium-term national development plan for year 2000-2011.
According to him, "The need to harmonise the draft National Economic Empowerment and Development Strategy (NEEDS 2) with the seven- point agenda was as a result of the desire to ensure that this administration's campaign promises are backed up with specific strategies for its actualisation.
"The output of the harmonisation process would form the medium term development plan that would guide the development operations of this administration."
Dr. Abba Sayyadi Ruma, minister of agriculture and water resources, who also spoke at the occasion, hinged the agricultural development challenges to include inconsistent agricultural policies, dearth of reliable planning statistics, ageing and unorganised farmers, poor uptake of research results, seed stock-poor yield potential, rain-fed production, low irrigated land area, and agriculture land-no collateral value, uncertain soil fertility, fertiliser and agriculture chemicals-supply, poor quality.
The policy thrust of the Yar'Adua's government in relation to boosting food sufficiency include, achieving substantial import substitution, achieve sustainable food security, attain gainful employment and modernisation of agricultural production, storage, processing, and marketing, he said.
Professor Chukwuma Soludo, governor of the Central Bank of Nigeria , in his presentation, submitted that the country's financial system is still weak, despite reforms.
The reforms, according to him, "need to be more holistic, coordinated and reinforcing, across the entire financial system.
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"Key sectors need to operate with proper reference to a central objective or global targets."
This administration has not shown the shadow of any vision for moving the country forward; there is no positive solid plan. The administration seems not to have found its feet yet and seems to be operating like somebody just gropping in the dark. Throwing such a colossal amount into almost completely unplanned economy is like pouring water into a basket. Hopefully, this money will not be poured into the economy until various programs adequately targetted to yield the maximum benefit to the country and for the benefit of which it would be used are thoroughly planned and... [Read Full Text]
this is a horrible idea
to have this much capital avaliable and just dump it into the air is going to cause staggering inflation and won't change anything on a long term basis.
the money needs to be used to finalize the energy and transportation goals of the country, that's ground one. After those two sectors are stablized and modern, the development of the nation is inevitable which such a large population with an industrious culture, abundant natural resources and so forth.
first develop the foundation to build an economy (transportation, electricity) and businesses will flock in to nigeria... [Read Full Text]
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