On Monday, June 10, at the third round of the 2013 ministerial
platform in Abuja, Coordinating Minister for the Economy and Minister of
Finance, Ngozi Okonjo-Iweala, spoke glowingly about the Nigerian
economy, saying the fundamentals were strong and that the economy was
buoyant beyond danger.
Mrs Okonjo-Iweala spoke at the 50th meeting of the 15-member Federal
Government Economic Implementation Team held behind closed-doors at the
presidential villa.
The implementation team is headed by the minister, and meets every
week. It was established by President Goodluck Jonathan to oversee the
effective implementation of decisions of the Economic Management Team
chaired by the president.
Other members of the committee are the Ministers of Petroleum
Resources, Power, Agriculture, Trade & Investment, Works and Health
as well as the Ministers of State for Finance and Health, the Chief
Economic Adviser to the President, the Special Adviser to the President
(Monitoring & Evaluation), the Director-General of the Budget
Office, the Director General of the Bureau of Public Enterprise and a
Deputy Governor of the Central Bank of Nigeria.
At Tuesday’s meeting, a presidency source said, the minister painted a
gloomy picture of the economy and hinted that there was an urgent need
for “stringent budgetary measures” to arrest the downward slide.
Although the meeting was convened to review the government’s plan to
create 3.5 million jobs in the agriculture sector and consider the
report of a subcommittee on the automotive industry, Mrs. Okonjo-Iweala
could not hold back on the disturbing prospect of the economy.
The minister explained that crude oil production now hovers around a
disturbing 1.3 million barrels per day, a figure far lower than that
seen during the height of the protracted militancy in the Niger Delta.
The Nigeria National Petroleum Corporation, NNPC, had on April 18
reported a drop in crude oil production in the first quarter of 2013,
January to March, which cost Nigeria a loss of crude oil revenue to the
tune of $1.23 billion (N190 billion). That loss is now set to continue
and the country might not be able to meet its obligation to its
customers.
Mrs. Okonjo-Iweala also informed the meeting that crude oil theft had
continued unabated and was at its highest level ever despite the best
effort by government to stem the tide.
Nigeria is estimated to lose about $6 billion annually to crude theft
and the development, the minister lamented, is now severely hurting the
economy.
The administration has paid several billions of naira to former Niger Delta militants to guard oil installations and block oil theft. But if anything, the situation has worsened.
The administration has paid several billions of naira to former Niger Delta militants to guard oil installations and block oil theft. But if anything, the situation has worsened.
At the meeting, the minister also predicted a further dip in national
revenue following the increase in shale gas production around the
world, a situation she said would definitely have serious adverse effect
on oil prices and sales.
Shale gas, according to Wikipedia, is natural gas found trapped
within shale formations and has become an increasingly important source
of natural gas in the United States and the rest of the world.
Shale gas now provides over 20 percent of U.S. natural gas need and
that figure is set to rise to 46 percent by 2035, according to the U.S.
government’s Energy Information Administration.
Mrs Okonjo-Iweala hinted that as more and more countries depend on
shale gas, the demand for Nigeria’s oil and gas would drop, with a
corresponding dramatic drop in revenue.
The minister also lamented that the situation with the economy was
not helped by the lack of accountability at the Nigerian National
Petroleum Corporation, NNPC, saying the corporation had refused to
render returns for its share of crude oil for local refining.
She thereafter informed her colleagues that beginning with the 2014
budget, there would be stringent budgetary measures and a lot of belt
tightening within the government, our sources say.
She did not provide details of what the drastic measures would be, said one of our sources.
Mrs. Okonjo-Iweala has never been this frank in the open about the economy and its gloomy prospects.
She has said on several occasions that the economy was buoyant and
strong, with its outlook remaining great, despite the current global
economic uncertainty.
On Monday, she spoke along that line, asking Nigerians to ignore
critics who have continued to insist that despite government claims, the
economy was not in good shape.
No comments:
Post a Comment