The minister of finance says the Nigerian economy has witnessed verifiable growth indices in all sectors.
The Minister of Finance and Coordinating Minister for the Economy, Ngozi Okonjo-Iweala, on Wednesday said that two years of President Goodluck Jonathan’s Transformation programme has helped build a stronger Nigerian economy with verifiable growth indices in all sectors.
The Minister, who was presenting a review of some of the achievements of the administration during the presentation of the mid-term report card as part of the 2013 Democracy Day, said the government has been able to overcome some of the challenges that Nigerians were concerned about prior to the coming of the Jonathan administration, while efforts are on to resolve others.
According to her, some of the problems on the economy the government have been grappling with through transformation agenda include insufficient jobs, poverty, dependency on one export commodity (oil), high food importation, huge housing deficit, poor infrastructure, high inflation, falling foreign reserves, rising domestic debts and high recurrent expenditure.
She said that within the last two years, the administration was able to achieve stability in the exchange rate of the Naira to the dollar and other international currencies, with Naira attracting between N155 and N160 to the dollar, while inflation has come down from about 12.4 per cent in 2011 to the single digit of about 9 per cent today, and foreign reserves risen from $32billion in 2011 to about $50billion today.
“Nigerian economy is today one of the fastest growing in the world at the rate of 6.5 per cent,” the minister said. “We need the economy to grow and the stability to be able to solve the big problems of job creation for the teeming population our youth.”
She said government has been working on reducing the high cost of government to barest level, with recurrent expenditure coming down from 74 per cent in 2011 to 68 per cent in the 2013 budget, adding that government is committed to take it down further using the budgeting system.
She said government has also resolved to keep Nigeria’s debt level at a reasonable level, pointing out that the new policy of retiring the debt accumulated through borrowing, rather rolling over debts, has helped bring the annual borrowing down from about N852billion in 2011 to N588billion in 2013.
For a start, she said, Nigeria has already paid off about N75billion of such debts stock this year instead of continuing to roll it over, as was the practice in the preceding years, adding that government has decided to put about N25billion each year in a sinking fund towards addressing the debt problem, with the support of the National Assembly.
“Government’s objective is to keep the debt, especially domestic borrowing by the Federal and State governments, at a manageable level,” she said.
On efforts to support the growth of key sectors of the economy, Ms Okonjo-Iweala said government has reviewed the waivers and tariff policies to focus on sectoral waivers rather than to individuals, with emphasis on agriculture, power, aviation, solid minerals sectors, to enable operators import equipments at zero duties rate.
Noting the improvement in the country’s trade figures as a result of diversification of the economic base, the Minister said with oil exports accounting for only 70 per cent of Nigeria’s trade volume, the balance of the economy is gradually shifting to non-oil sector, adding that more items are being produced in this sector than being consumed, including vegetable oil, textiles, plastics, etc.
On closing the leakages in the economy, the minister noted the achievements recorded in sanitizing the process in petrol distribution and supply in the country, pointing out that of about N232billion identified to have been stolen fraudulently, about N14billion has so far been recovered, while government has tightened the audit processes and restored sanity in the management of the petroleum subsidy regime.
Instead of 143 oil marketers involved on petroleum products importation two years ago, she said the number has been reduced to drastically to 32 for easy monitoring and management, while new processes are being introduced in other sectors to check corruption in the system.
To effectively manage the pension system in the country and rid it of the issue of fraud, she said a new department, namely the pension transition department, has been created, while all the pension schemes, except that of the military, are to be unified, including those of the civil service, immigration, Customs, etc, to bring them under a central administration, for close monitoring of the management to serve the pensioners.
On efforts to effectively monitor the country’s financial system, the minister said apart from the integrated personnel and payroll system introduced for the direct electronic payment of civil servants, the Ministry of Finance has established a system that would connect all government departments to ensure that monies are transferred electronically.
Similarly, she said the ministry is also to establish a system that would give the Finance ministry an easy overview of all the government monies in both the Central Bank and commercial banks, to enable government know its cash position at any time.
“All these are being done to strengthen the economy and give it the basis to continue growing,” she said, adding that Nigeria has become the highest destination for global investment, with over $7.5billion of investments coming into the country in the last two years.
“Our banks and stock market are strong. The elimination of VAT and stamp duties that stood in the way of investments in the stock market has brought change and registration of more companies, with the index rising by about 71 per cent since 2012.
“Insurance policies have been strengthened, with policy holders increasing from 700,000 in 2010 to 1.5million in 2012, while payment of insurance claims has increased from N37billion to N52billion in 2012,” she said.
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