Meltdown: FG Works out Relief Package
President Umaru Musa Yar’Adua has directed relevant government agencies to take immediate steps to work out a palliative package to cushion the impact of the global economic crunch on Nigerians – but this will not include a salary increase.
Meanwhile, the Governor of the Central Bank of Nigeria (CBN), Prof. Chukwuma Soludo, has described as “unfortunate misrepresentations” statements attributed to him that he declared Nigeria as “insulated” and “immune” to the global economic crisis.Speaking with State House Correspondents yesterday, the Special Adviser to the President on Media and Publicity, Mr. Olusegun Adeniyi, disclosed that the palliative directive came after the President was properly briefed following Tuesday’s meeting of the Presidential Steering Commit-tee on the Global Economic Meltdown during which a number of palliative measures were proposed on the short, medium and long terms to mitigate the effects of the global economic crisis on the country.
He disclosed that Governor Adams Oshiomhole of Edo State, at the end of the meeting which was chaired by the Finance Minister, Dr. Mansur Muhtar, was mandated to lead some members of the committee to brief the president on the decisions reached. The presidential spokesman further disclosed that Yar’Adua, after the briefing, immediately directed the CBN and Finance Ministry to liaise with other agencies and do more work on some short-term palliative measures being proposed so that they could be implemented soon.
Shedding more light on the incentive package, he said while salary increment was not on the card given the current falling crude oil price in the international market, the proposed incentives would put smiles on the faces of Nigerians soon and raise the purchasing power of the masses. “What is being worked out is a package of incentives that will ginger production, increase the purchasing power of the ordinary man on the street and help generate employment opportunities.
“In the medium- and long-term strategies, aside infrastructural development, the government is looking in the direction of agriculture through commercial farming clusters and value chain not only for food security but for employment generation. In the oil sector, the local content guidelines are being reviewed as a component of the reforms to give more leverage to our people,” he stated.The presidential spokesman said Muhtar and Soludo would likely get back to the president before this weekend and that measures being worked out would be announced as soon as their details were sorted out.
On the 2009 budget expected to be approved by the National Assembly this week, he said the president had already received the report of the committee he set up to work out the modalities for its implementation, pointing out that with the measures being put in place, a lot would be achieved this year. “In the power sector, the Minister, Dr. Lanre Babalola, is likely to be given a special dispensation by the president with regards to power of spending so that he can complete many of the projects and I think the details are currently being worked out by the Director General of Bureau of Public Procurement, Mr. Emeka Ezeh. “While the economic outlook does not look promising given the price of oil, the president remains optimistic that Nigeria can seize the moment to redirect our economy and begin on the road to prosperity,” he said.
Reviewing the current global economic crisis further, Adeniyi said those criticising the return of huge sums of money meant for the execution of the 2008 budget to the treasury could now see the wisdom of spending only when sure of achieving set targets, comparing it with the past when he said unspent allocations were not returned, yet targets were hardly met. All members, including Governors Babatunde Fashola, Oshiomhole, Bukola Saraki and Isa Yuguda of Lagos, Edo, Kwara and Bauchi states respectively as well as private sector members such as Bismack Rewane, Tony Elumelu and Aliko Dangote were all present at the meeting which proposed some palliative measures on the short, medium and long-term basis.
In a press statement signed by Special Assistant, Media and Public Relations to the CBN governor, Mr. Isaac Okoroafor, media commentators and analysts were said to have misrepresented Soludo’s views.The statement read: “Our attention has been drawn to the unfortunate misrepresentations of the Governor of the Central Bank of Nigeria, Professor Chukwuma C. Soludo’s views on the impacts of the global financial crisis on the Nigerian economy, by some media commentators and analysts.
To put the record straight and for the avoidance of doubt, we have carefully reviewed copies of all his presentations as well as the full transcripts of his public pronouncements on the matter, and can confirm that at no time has Professor Soludo said that the Nigerian economy is ‘IMMUNE’ or ‘INSULATED’ from the global crisis.“We have posted on the CBN Website, full transcripts of Prof. Soludo’s TWO presentations to the Senate on October 21, and December 16, 2008; Interactive session with the Media on the Financial Crisis held in Lagos on October 31, 2008; and Powerpoint presentation to the House of Representatives on January 21, 2009. See also ThisDay Newspaper of November 10, 2008 on the full transcript of Prof. Soludo’s analysis of the cause of Nigeria’s capital market crisis (presented at the ThisDay Town Hall meeting on October 3, 2008) which he attributed primarily to the global crisis.
In these presentations, Prof. Soludo has clearly shown how the global crisis affects the Nigerian economy through the impacts on the capital market and by extension the banks through their exposure to the capital market; collapsing oil price and implications for external reserves, fiscal revenue, and exchange rate; the decline in capital inflows and trade/credit lines to the banks; etc. Specifically, during the presentation to the Senate (which was broadcast live), he elaborated on the possible second round effects on the economy.“Indeed, the CBN’s Monetary Policy Committee (MPC) had, in its meeting of September 18, 2008, taken far reaching measures to proactively inject liquidity in the banking system as part of its strategy to minimize the effects of the global credit crunch on our banks.
Prof. Soludo has also often warned of the likely inflationary impacts of the liquidity injection, and also put forward concrete proposals on how Nigeria can effectively weather through the global crisis including the key legislations which the National Assembly needs to pass urgently.“Prof. Soludo has been consistent in assuring Nigerians about the health of our banks and the safety of our foreign reserves.
At the beginning of the crisis, Professor Soludo had been invited to several fora to answer mostly two questions. First, Are Nigerian banks safe or do they require any bailout? Second, Are Nigeria’s foreign reserves safe? To the first question, Professor Soludo has been consistent in stating that because Nigeria moved ahead of the world to recapitalize and consolidate its banking system, Nigerian banks are robust and strong enough to take losses and that they are protected from the full effects of the global financial system. He has consistently assured that the CBN would take all necessary measures to ensure that Nigerian banks do not fail like their counterparts in some countries. To the second question, he has also consistently reassured that our foreign reserves are safe.“Furthermore, Prof. Soludo has consistently pointed out that some of the ‘shock absorbers’ that could enable Nigeria minimize the full weight of the global crisis include: recapitalized and consolidated banks which continue to post profits and provide credit to the economy at unprecedented rate; higher external reserves than at previous times; lower debt-to-GDP ratio which provides room for greater fiscal expansion; agriculture as the dominant sector of the economy and hence the likelihood that Nigeria could avoid experiencing a recession; exchange rate flexibility to ensure external balance; the ‘excess crude savings’ which could provide some cushion; the liberalized economy and stronger private sector as well as the Government’s economic management.
All these lead Prof. Soludo to conclude that Nigeria’s GDP, which is led by the non-oil sector, would continue to grow positively, despite the crisis. However, he is under no illusion about the magnitude of challenges that lie ahead, and how all stakeholders must work harder, together to ensure that Nigeria minimizes the consequences of the crisis and takes full advantage of the opportunities offered by it.“So far, Prof. Soludo has not been proved wrong. The latest estimates from the National Bureau of Statistics (NBS) indicate that Nigeria’s GDP grew by 6.8% in 2008 compared to 6.2% in 2007 despite the crisis, and this was led by the non-oil GDP at 9.5%.
Indeed, there is a consensus global expert opinion that developing countries (especially Africa) would continue to grow positively in spite of the crisis (See ThisDay Newspaper January 30, 2009; and latest version of the IMF’s World Econo-mic Outlook). Furthermore, no Nigerian bank has failed, and our external reserves remain safe.“We have taken pains to clarify these issues because at a time like this (unprecedented in human history), there is absolute need for clarity and effective communication. The Nigerian economy cannot afford any miscommunication regarding the crisis at this time. Both my office and that of Head, Corporate Affairs, Central Bank of Nigeria, remain open to clarify any issues pertaining to the CBN’s pronouncements on these matters.”
Source:This day Newspaper
Meanwhile, the Governor of the Central Bank of Nigeria (CBN), Prof. Chukwuma Soludo, has described as “unfortunate misrepresentations” statements attributed to him that he declared Nigeria as “insulated” and “immune” to the global economic crisis.Speaking with State House Correspondents yesterday, the Special Adviser to the President on Media and Publicity, Mr. Olusegun Adeniyi, disclosed that the palliative directive came after the President was properly briefed following Tuesday’s meeting of the Presidential Steering Commit-tee on the Global Economic Meltdown during which a number of palliative measures were proposed on the short, medium and long terms to mitigate the effects of the global economic crisis on the country.
He disclosed that Governor Adams Oshiomhole of Edo State, at the end of the meeting which was chaired by the Finance Minister, Dr. Mansur Muhtar, was mandated to lead some members of the committee to brief the president on the decisions reached. The presidential spokesman further disclosed that Yar’Adua, after the briefing, immediately directed the CBN and Finance Ministry to liaise with other agencies and do more work on some short-term palliative measures being proposed so that they could be implemented soon.
Shedding more light on the incentive package, he said while salary increment was not on the card given the current falling crude oil price in the international market, the proposed incentives would put smiles on the faces of Nigerians soon and raise the purchasing power of the masses. “What is being worked out is a package of incentives that will ginger production, increase the purchasing power of the ordinary man on the street and help generate employment opportunities.
“In the medium- and long-term strategies, aside infrastructural development, the government is looking in the direction of agriculture through commercial farming clusters and value chain not only for food security but for employment generation. In the oil sector, the local content guidelines are being reviewed as a component of the reforms to give more leverage to our people,” he stated.The presidential spokesman said Muhtar and Soludo would likely get back to the president before this weekend and that measures being worked out would be announced as soon as their details were sorted out.
On the 2009 budget expected to be approved by the National Assembly this week, he said the president had already received the report of the committee he set up to work out the modalities for its implementation, pointing out that with the measures being put in place, a lot would be achieved this year. “In the power sector, the Minister, Dr. Lanre Babalola, is likely to be given a special dispensation by the president with regards to power of spending so that he can complete many of the projects and I think the details are currently being worked out by the Director General of Bureau of Public Procurement, Mr. Emeka Ezeh. “While the economic outlook does not look promising given the price of oil, the president remains optimistic that Nigeria can seize the moment to redirect our economy and begin on the road to prosperity,” he said.
Reviewing the current global economic crisis further, Adeniyi said those criticising the return of huge sums of money meant for the execution of the 2008 budget to the treasury could now see the wisdom of spending only when sure of achieving set targets, comparing it with the past when he said unspent allocations were not returned, yet targets were hardly met. All members, including Governors Babatunde Fashola, Oshiomhole, Bukola Saraki and Isa Yuguda of Lagos, Edo, Kwara and Bauchi states respectively as well as private sector members such as Bismack Rewane, Tony Elumelu and Aliko Dangote were all present at the meeting which proposed some palliative measures on the short, medium and long-term basis.
In a press statement signed by Special Assistant, Media and Public Relations to the CBN governor, Mr. Isaac Okoroafor, media commentators and analysts were said to have misrepresented Soludo’s views.The statement read: “Our attention has been drawn to the unfortunate misrepresentations of the Governor of the Central Bank of Nigeria, Professor Chukwuma C. Soludo’s views on the impacts of the global financial crisis on the Nigerian economy, by some media commentators and analysts.
To put the record straight and for the avoidance of doubt, we have carefully reviewed copies of all his presentations as well as the full transcripts of his public pronouncements on the matter, and can confirm that at no time has Professor Soludo said that the Nigerian economy is ‘IMMUNE’ or ‘INSULATED’ from the global crisis.“We have posted on the CBN Website, full transcripts of Prof. Soludo’s TWO presentations to the Senate on October 21, and December 16, 2008; Interactive session with the Media on the Financial Crisis held in Lagos on October 31, 2008; and Powerpoint presentation to the House of Representatives on January 21, 2009. See also ThisDay Newspaper of November 10, 2008 on the full transcript of Prof. Soludo’s analysis of the cause of Nigeria’s capital market crisis (presented at the ThisDay Town Hall meeting on October 3, 2008) which he attributed primarily to the global crisis.
In these presentations, Prof. Soludo has clearly shown how the global crisis affects the Nigerian economy through the impacts on the capital market and by extension the banks through their exposure to the capital market; collapsing oil price and implications for external reserves, fiscal revenue, and exchange rate; the decline in capital inflows and trade/credit lines to the banks; etc. Specifically, during the presentation to the Senate (which was broadcast live), he elaborated on the possible second round effects on the economy.“Indeed, the CBN’s Monetary Policy Committee (MPC) had, in its meeting of September 18, 2008, taken far reaching measures to proactively inject liquidity in the banking system as part of its strategy to minimize the effects of the global credit crunch on our banks.
Prof. Soludo has also often warned of the likely inflationary impacts of the liquidity injection, and also put forward concrete proposals on how Nigeria can effectively weather through the global crisis including the key legislations which the National Assembly needs to pass urgently.“Prof. Soludo has been consistent in assuring Nigerians about the health of our banks and the safety of our foreign reserves.
At the beginning of the crisis, Professor Soludo had been invited to several fora to answer mostly two questions. First, Are Nigerian banks safe or do they require any bailout? Second, Are Nigeria’s foreign reserves safe? To the first question, Professor Soludo has been consistent in stating that because Nigeria moved ahead of the world to recapitalize and consolidate its banking system, Nigerian banks are robust and strong enough to take losses and that they are protected from the full effects of the global financial system. He has consistently assured that the CBN would take all necessary measures to ensure that Nigerian banks do not fail like their counterparts in some countries. To the second question, he has also consistently reassured that our foreign reserves are safe.“Furthermore, Prof. Soludo has consistently pointed out that some of the ‘shock absorbers’ that could enable Nigeria minimize the full weight of the global crisis include: recapitalized and consolidated banks which continue to post profits and provide credit to the economy at unprecedented rate; higher external reserves than at previous times; lower debt-to-GDP ratio which provides room for greater fiscal expansion; agriculture as the dominant sector of the economy and hence the likelihood that Nigeria could avoid experiencing a recession; exchange rate flexibility to ensure external balance; the ‘excess crude savings’ which could provide some cushion; the liberalized economy and stronger private sector as well as the Government’s economic management.
All these lead Prof. Soludo to conclude that Nigeria’s GDP, which is led by the non-oil sector, would continue to grow positively, despite the crisis. However, he is under no illusion about the magnitude of challenges that lie ahead, and how all stakeholders must work harder, together to ensure that Nigeria minimizes the consequences of the crisis and takes full advantage of the opportunities offered by it.“So far, Prof. Soludo has not been proved wrong. The latest estimates from the National Bureau of Statistics (NBS) indicate that Nigeria’s GDP grew by 6.8% in 2008 compared to 6.2% in 2007 despite the crisis, and this was led by the non-oil GDP at 9.5%.
Indeed, there is a consensus global expert opinion that developing countries (especially Africa) would continue to grow positively in spite of the crisis (See ThisDay Newspaper January 30, 2009; and latest version of the IMF’s World Econo-mic Outlook). Furthermore, no Nigerian bank has failed, and our external reserves remain safe.“We have taken pains to clarify these issues because at a time like this (unprecedented in human history), there is absolute need for clarity and effective communication. The Nigerian economy cannot afford any miscommunication regarding the crisis at this time. Both my office and that of Head, Corporate Affairs, Central Bank of Nigeria, remain open to clarify any issues pertaining to the CBN’s pronouncements on these matters.”
Source:This day Newspaper