CIBN urges speedy implementation of ERGP
The Institute made this call at the 5th Annual Economic Outlook organised by the CIBN Centre for Financial Studies (CIBNCFS), in collaboration with B. Adedipe Associates Limited (BAA), themed: ‘Implications for Businesses in Nigeria In 2019’, held in Lagos.
Speaking at the event, the President and Chairman of Council, CIBN, Uche Olowu, said despite efforts being made by the federal government, Nigeria is still faced with insecurity, huge infrastructural deficits, and high poverty levels, which the ERGP would help tackle.
According to him, although there is a slow recovery of the country’s economy since it came out of recession, government must intensify efforts if the identified challenges would be sustainably addressed.
His words: “The country needs to rethink its strategy of handling some of its economic activities. Nigeria needs to re-orient its federal budget currently dominated by recurrent spending towards more capital expenditure and accumulating savings to sustain social spending.
“Also, delays in budget approval and signing have become predominant that it is not available for implementation, in most cases in the first quarter, and rare cases a better part of the second quarter over the past 15 years.
“Incidentally, this year is not being an exception, as this has led to uncertainty in the system, affecting the delivery of projects, which has profound impact on productivity in the economy.”
He implored the executive and legislative arms of government to close ranks to release the budget on time and urged the government to ratify the Continental Free Trade Agreement (CFTA), designed to create a single continental market for goods and services as well as the free movement of businesspersons and investments across the continent.
In a keynote address, a former Director, Currency Operations Department, Central Bank of Nigeria (CBN), Olufemi Fabamwo, said Nigeria’s weakening oil price and reduced quota by the Organisation of the Petroleum Exporting Countries (OPEC), to a cap of 1.685 million barrels per day (mbpd) for the 1st Half (H1) of 2019, will have a negative impact on the nation’s economy.
He noted that the persistent security challenges arising from insurgency in the Northeast region of the country, banditry and herdsmen attacks and political uncertainties ffrom the upcoming general elections would also have effects on Nigeria’s economic activities.
He said: “The decline in oil production is imminent, given OPEC quota cut by 3.15% to a cap of 1.685 mbd for H1 2019, or 2.035 mbd including condensate, at a time when current production stood at 1.73 mbd and the rise in the number of oil rigs to 11 in December 2018.
“This may prove a major risk to the realisation of the 2019 budget, which was based on $60/barrel and 2.3mbd, as oil revenue shortfall will deplete external reserves, constrain CBN’s aggressive interventions, weaken the Naira and raise vulnerability to capital flow reversals.”
He maintained that the oil shortfall would cause the Federation Account Allocation Committee (FAAC) disbursements to drop, and would hamper the implementation of the agreed new minimum wage by states.
He reiterated the need for the passage of the Petroleum Industry Governance Bill (PIGB) this year by the government, saying the non-passage remains a setback to the desired rapid growth of the oil sector.
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