Osinbajo unveils FG's plans to jumpstart economy

– Vice President Yemi Osinbajo admits that the economy has been on a massive downturn but says that the government has concluded its recovery agenda

– He blames vandalizations in the Niger Delta for contributing to Nigeria’s economic woes

– Osinbajo says the government will release N100 billion in few days to help boost the economy too

Vice president Yemi Osinbajo speaking at the LCCI seminar on Thursday, August 11
The vice president has revealed the economic agenda of the government in the bid to stabilize the tottering economy even as the harsh conditions bite harder.

Speaking at the 2016 presidential policy dialogue session which was organised by the Lagos Chamber of Commerce and Industry (LCCI) in Lagos on Thursday, Osinbajo said the government will release N100 billion in the next few days to increase money in circulation.

He gave the list of the major considerations by the government:

1. Reduce fiscal and forex imbalances;

2. Boost dollar liquidity;

3. Curb inflation;

4. Lower interest rate and ensure lending to the real sector;

5. Increase FDIs and FPI by sustaining enabling policies.

In the speech he read at the seminar, Osinbajo painted a gloomy picture of the economy but said the government is putting the above plans and some others in place to ensure the economy returns to smooth sailing.

“Foreign Direct Investment, which stood at about USD395 million in Q1 2015 declined by 56% to USD175 million by Q1 of 2016.

“FPI, which averaged USD621 million in Q1 of 2015, had declined to USD90.3 million by Q1 2016. Inflation is at 16.5%. Depreciation of the naira, increase in importation costs due to scarcity of FX.

“GDP declined from 6.3% in 2014 to 2.15% in 2015 and -0.36% in Q1 2016. Declining earnings from oil in the past eight months due to vandalization of pipelines and export assets in the Niger Delta. Power output fell from 5kMW in Feb. to about 2.5k recently on account of over 60% loss in gas production due to pipeline vandalization,” he said.

He continued: “In order to tackle these problems, permit me to elaborate on some of the steps taken in this regard.

Priority attention was given to assist the States and Local Govts pay the salaries of workers, which were several months in arrears.
We have had three such interventions including the latest loan of N90bn as part of a fiscal responsibility plan for States.
These interventions have helped to boost household spending which were key steps to prevent the economy from falling into deep recession.
We have pledged to keep capital spending in the budget at a minimum of 30%.
Accordingly, we have already made capital releases of N332billion, with another N100 billion set to be released in the next few days.
Other policy instruments used in this regard include the TSA, which has brought transparency into inflows & outflows of government monies
A great effort has been made to improve non-oil revenues.
This includes bringing an additional 700k companies into the tax net as compared to the targeted 500k set at the beginning of the year.
FIRS has achieved 73.17% of its target for the first half of the year.
Similarly, milled rice capacity is being increased from 3million tons annually to 10million tons of paddy annually.
Meanwhile, power generating companies (gencos) have threatened to switch off electricity nationwide should the federal government fail to pay up the billions of naira owed them by its agencies and parastatals.

The companies, six of them, in a joint statement on Wednesday, August 10, said they would shut down electricity generation very soon if the debt, totalling around N156 billion ($485-million) is not paid up in full.