The Senate on Wednesday resolved to invite the Minister of Finance, Mrs. Kemi Adeosun and Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, to brief it on the state of the country’s economy.
The invitation followed the adoption of a motion on “urgent need to address present economic state of the nation”
Senator Bassey Albert Akpan (Akwa Ibom North East) who sponsored the motion said that the motion is informed by the National Bureau of Statistics release last week bordering on the nation’s economic scorecard for the first quarter of the year 2016 for Gross Domestic Product (GDP), inflation and unemployment.
He observed that the report depicted that the country’s economy plunged into recession with a decline of 0.3 per cent year-on-year in real term which is a drastic drop from 2.11 per cent in quarter four 2015 IN GDP.
He also observed that from the report, unemployment rate rose to 21.1 per cent in quarter one 2016 from 10.4 per cent in Q4 2015.
According to him, unemployment also increased to 19.1 per cent from 18.7 per cent in the same period while the rate inflation rose from 9.6 per cent in January 2016 to 13.8 per cent in April 2016 with attendant increase in prices of basic food commodities and services in the country.
Senator Akpan said that he is worried that the declining GDP and unemployment besides the current high inflation rate clearly shows that the economic policies of the country “are not achieving desired impact and requires an urgent review to avoid further plunge in our economy.”
The lawmaker said that he is further worried that the current economic contractions is the first major drastic slump since June, 2004, which according to the CBN is a 12-year-low when the World Bank’s position is a 21-year-low.
He recalled that the CBN, had in March, 2016 deployed a contracting monetary policy increasing bench mark interest rate from 11% and cash reserve ratio from 20% to 22.5%.
“The question is why contracting monetary policy instead of expansionary monetary policy of boosting economic activities at such a critical time as this,” he asked.
Senator Akpan noted that he is deeply concerned that the continued complacency of the current state of the economy if allowed unchecked will set the tone for a full blown economic recession by the end of June 2016 as already confirmed by the CBN in its Monetary Policy Committee meeting on Tuesday.
The Akwa Ibom lawmaker said that he is disturbed that the current economic situation in the country coupled with lack of required foreign exchange to boost import of raw materials for domestic industries will worsen the unemployment and poverty situation in the country.
He noted that considering the decline in oil production in the Niger Delta by 800,000 b/d vis a vis the benchmark production for 2016 budget of 2.2mb/d, owing to the vandalisation of oil pipe lines, in addition to the inability of non oil revenue collecting agencies to meet to meet revenue targets owing to the economic crunch.
Senator Akpan concluded that he is convinced that with the current economic slump, “meeting the key budgetary revenue projection of the 2016 budget is practically impossible and the need to have a rethink to avoid deepening budget deficit or poor budget implementation.”
He added that “whether we like it or not, no matter what we call it, the Naira was devalued Tuesday.”
The single prayer that the Senate should invite the Minister of Finance, Mrs. Kemi Adeosun and the CBN Governor, Mr. Godwin Emefiele to brief the Senate on the monetary/fiscal policies adopted to salvage the economic situation was unanimously adopted.
Senate President, Abubakar Bukola Saraki, who briefly presided over the plenary, ruled out any debate.
Saraki said that since Adeosun and Emefiele would appear before the Senate in plenary, there was no need to pre-empt them.
Senator Biodun Olujimi (Ekiti South) who seconded the motion said that it is obvious that the country has no economic blue print to drive its economy.