Nigeria’s Troubled Economy: What Osinbajo, governors discussed at NEC meeting

A meeting of the National Economic Council (NEC) held Thursday in Abuja with members discussing measures they said are planned to take the country out of recession.

NEC is composed of all the 36 state governors, the minister of the Federal Capital Territory and the governor of the Central Bank of Nigeria. Thursday’s meeting, the first this year, was presided over by Acting President Yemi Osinbajo.

“(The) Minister of Budget and National Planning assured the Council members that Federal Government has a recovery plan that will take Nigeria out of the woods,” Laolu Akande, the spokesperson for Acting President Osinbajo, said in a statement at the end of the meeting.

Mr. Akande also quoted the Finance Minister, Kemi Adeosun, who briefed the Council, as announcing the hiring of eight accounting firms to audit the monthly Budget Support Facility to states, a verification process she said would ensure benefiting state governments comply with the mutually agreed Fiscal Sustainability Plan prescribed by NEC.

Below are highlights of the NEC meeting.

NEC (1ST in 2017) 74TH NEC MEETING – THURSDAY, 16TH FEBRUARY, 2016

A.     INAUGURATION OF THE NATIONAL ROAD SAFETY ADVISORY COUNCIL BY HIS EXCELLENCY ACTING  PRESIDENT

• Budget and National Planning Minister made a presentation to the Council on the National Road Safety Strategy (NRSS) 2014 – 2018 document before the inauguration.

• He said the NRSS document was approved by FEC and has provided for the establishment of the Advisory Council, as a demonstration of Government’s commitment to address the challenges of road safety in the country in line with UN Agenda to reduce road accident related deaths.

• Members of the 24-man Advisory Council include the following:

• Six Governors representing each geopolitical zone as follows:

• South-West            –       Governor of Lagos State

• South-East             –      Governor of Anambra State

• South-South           –       Governor of Delta State

• North-West            –       Governor of Kaduna

• North East             –       Governor of Gombe

• North-Central         –       Governor of Kwara State

Others include:

• Honourable Minister of Transport

• Honourable Minister of Power, Works and Housing

• Honourable Minister of Education

• Honourable Minister of Health

• Honourable Minister of Environment

• Honourable Minister of Finance

• Honourable Minister of Justice

• Honourable Minister of Labour and Productivity

• Honourable Minister of Interior

• Honourable Minister FCT

• Honourable Minister of Information and Culture

• Honourable Minister of Budget and National Planning

• National Security Adviser (NSA)

• Secretary to the Government of the Federation (SGF)

• President NACCIMA

• President Nigeria Society of Engineering (NSE)

• FRSC Corp Marshall

B.     PRESENTATION BY MINISTER OF AGRICULTURE

• Council was informed of the massive wheat production in the States of Jigawa, Kano, Kebbi and Zamfara among others.

• The States however appealed to the Federal Government to make plans for the purchase of excess wheat to ensure price stability and sustainable production.

• Council agreed to discuss and make adequate buy-back arrangements in order to support price stability.

C.     REPORT ON EXCESS CRUDE PROCEEDS BY THE FINANCE MINISTER

• Minister of Finance reported to the Council that the balance in Excess Crude Account (ECA) stood at USD 2,458,382,844.03 as at February 15, 2017

D.     UPDATE ON BUDGET SUPPORT LOAN FACILITY

• Minister of Finance also reported that Eight Accounting Firms have been appointed to start the verification process of the monthly Budget Support Loan Facility to States, based on the approved Fiscal Sustainability Plan of NEC.

E.     ON ECONOMIC RECOVERY PLAN

• Minister of Budget and National Planning assured the Council members that Federal Government has a recovery plan that will take Nigeria out of the woods.

• Consultations on the plan are ongoing to firm-up the plan with clear roles for all the stakeholders and the States.

• He told the Council that the plan addresses the following:

• Agriculture and food security
• Energy sufficiency-power and petroleum availability
• Improving transportation infrastructure
• Industrialization, SMEs, and manufacturing
• Stabilization of the macro-economic environment

F.     ON THE EXCHANGE RATE

• After a brief presentation on Forex Policy options by the CBN Governor, Council members generally expressed concern over the current situation of the exchange rate and called for an urgent review of the current Forex Policy, especially the gap between interbank and the parallel market rates.  The CBN Governor sued for patience and understanding, assuring that the situation is being closely managed.

G.     UPDATE ON THE BOARD APPOINTMENTS INTO THE NIGERIA SOVEREIGN INVESTMENT AUTHORITY (NSIA)

• Minister of Finance reported that a member each from the six geo-political zone has been nominated as follows:

• North-East – Mrs. Halima Buba
• North West – Mr. Bello Maccido
• North Central – Ms. Lois Laraba Machunga-Disu
• South West – Mr. Babajide Zetilin
• South East – Mr. Urum Kalu Eze
• South-South – Mr. Abue Ighodalo

• Council members unanimously adopted the nominations and forwarded them to the President for his final approval.

H.     ANNUAL REPORT AND ACCOUNTS OF THE NIGERIA SOVEREIGN INVESTMENT AUTHORITY (NSIA) BY THE MD/CEO OF NSIA

• Managing Director/Chief Executive Officer, Mr. Uche Orji presented a report to Council on the NSIA annual reports and accounts for the year ended 2015 and update on 2016 activities.

• In its report to NEC, Council members were informed that Nigeria Sovereign Wealth Fund (NSWF) has the highest ranking in Africa in terms of performance and capitalization.

• The report highlights, among others, the following:

• Financial performance 2014 to Q3 2016

• Update and investment strategy on the NSIA Future Generation Fund (FGF)

• NSIA Infrastructure strategy and Agriculture Fund

• NSIA – Old Mutual Real Estate Co-Investment Vehicle, among others.

• NSIA outlook, among others, are as follows:

• NSIA plans to increase domestic infrastructure investment in 2017 as there are compelling opportunities in the environment.

• NSIA will also focus on “Social Infrastructure” including investments in the form of affordable housing, and healthcare through the development of specialist hospitals.

• Council, while adopting the report of the NSIA,  decided to inject a fresh $250 million into the SWF sourced from the ECA.

I.    VALEDICTORY SESSION FOR ONDO STATE GOVERNOR

• Council held a valedictory session for the Ondo State Governor Dr. Olusegun Mimiko who was attending the meeting for the last time as his tenure expires this month.

• Council members commended Dr. Mimiko’s contributions to the Council and commended him for facilitating a smooth transition in the State. In his response, the out-going Governor praised President Muhammadu Buhari for his leadership of the nation, the Vice President as chairman of the Council for his “productive leadership and personal commitment,” and the Council members for an enjoyable relationship and quality of debate.

• Both Mimiko and the Ondo State Governor-elect who was also in attendance today in observer status hugged each other to the delight of the Council, attracting a huge round of applause.