Udoma: Stimulus Plan Not Meant to Sell Off All Critical National Assets.

Minister of Budget and National Planning, Senator Udoma Udo Udoma, has said that the primary objective of federal government’s fiscal stimulus plan was not to sell off all major critical national assets but to source immediate funds to reflate the economy and implement capital projects in the 2016 budget.

The minister said Federal Government was exploring several angles in the asset sale proposal, including repurchase option, which will make provision for buy-back of those assets when the nation’s economic situation improves.

Also at the weekend, Senate President Bukola Saraki called for executive/legislative collaboration to steer the nation out of the current recession.

Meanwhile, following the wave of militancy in the Niger Delta region, where the nation’s oil wealth is located, a cross-section of stakeholders, under the aegis of the Initiative for Peace, Governance and Development, yesterday, met at the Transcorp Hilton, Abuja and resolved to work with Chief E. K. Clark’s committee on how to achieve lasting peace through constructive engagement of the various tendencies in the region.

The National Economic Council (NEC) had last week approved the sale of some national assets as part of overall measures to take the economy out of recession, a move that has been opposed by many.

A statement issued by the Special Adviser on Media to the Budget and National Planning minister, Mr. Akpandem James, on Saturday, said Udoma gave the explanation on the proposed assets sale in Lagos while briefing newsmen on the forthcoming Nigeria Economic Summit (NES).
The intention of government, according to Udoma, is just to get enough money to fund the 2016 budget and get the economy back on the path of recovery.

Government, he stated, needed to inject a large dose of funds into the system to get the economy back on track and to faithfully implement those provisions in the capital budget tailored at reflating the economy and aiding the diversification process.
Udoma explained that the country had lost almost half its expected revenue and would need to urgently source the shortfall to enable government faithfully implement the budget.

This unfortunate scenario, he explained, prompted the Economic Management Team to urgently work out a fiscal stimulus plan to generate immediate large injection of funds into the economy through asset sales, advance payment for license rounds, infrastructure concessioning, use of recovered funds, among others, to reduce the funding gap.

The other option, according to the minister, would have been to source for additional loans, beyond the level of borrowing already projected for in the 2016 Budget. He said this would not be a wise option as it would raise the level of debt service to an unsustainable level.

Udoma insisted that the country’s economy may not have gone into recession but for the drastic fall in oil production levels due to disruptions caused by militant activities. At worst, he pointed out, it would have been a flat performance that would have sign-posted a new curve in the economy trajectory that would subsequently put it on the path to recovery and sustainable growth.

He added that the government appreciated that the downturn in the economy had brought hardship to the people, but he assured that government was committed to redressing the situation.

“Our goal is to unlock the economic potentials of the non-oil and high-employment sectors, so as to achieve a sustainable inclusive growth that will ensure that the majority of Nigerians become more productive, thereby reducing poverty.

“Thus, we are deliberately working towards diversifying the Nigerian economy by ensuring that the non-oil sector drives the economy because this is the sector that contributes the most to GDP; and, has more capacity to employ.”

The basic strategy, he pointed out, is to reflate the economy through fiscal stimulus and strategic implementation of annual budgets.

“What this means is that we are geared to strategically spend our way out of recession. Unfortunately, we have not met all our planned expenditures for 2016 due to low revenue outturns. However, we have ensured that the resources that we release are targeted at priorities that will stimulate activities in the economy. We are also developing a more robust monitoring and evaluation framework to track performance”, he explained.

Udoma said bad as it is, the current situation provides the country with an opportunity to revamp the economy and put it on the path to sustainable growth; but in doing so, Nigerians must reduce their demand for foreign products, focus attention on refining petroleum products locally, return to agriculture, develop the solid minerals’ sector and stay the course even if the price of oil goes up again.

Calling for collaboration between the executive and the legislature to steer the nation out of the current recession, Senate President Saraki at the weekend said he was impressed with the patriotism demonstrated by senators during the debate on the state of the economy last week irrespective of political party affiliations,

Saraki said, “all the Senators really contributed on the issue of solutions in their opinion, in their own analysis, from their own research and they came up with what we believe is the best way to help the country get out of recession, as regards solutions that we in the National Assembly need to do and as 

regards what the executive needs to do.”

He said the Senate, when its reconvenes Tuesday, would work on the report of the ad hoc committee mandated to harmonise the various contributions of senators on the issue.

“We set up an ad hoc committee to put together all the recommendations that were put forward by different senators. Our plan is that on Tuesday, we will now take them and be able to pass resolutions on some of those issues and communicate those resolutions to the executive.,” he said.

Saraki explained the precarious situation in which the nation had found itself adding that there was need to think out of the box in order to get out of the recession.

“The problem is that we are in a situation where the forex inflow, and the forex inflow comes from different sources, it comes from government’s sale of crude oil, it comes from export proceeds, it comes from foreigners and Nigerians investing in companies in Nigeria, it comes from hedge funds that believe in the market, that invest in our bonds, treasury bills, and stock market. It even comes from Nigerians that have money abroad, that bring money in. I think I have counted five. Out of these five, only one is functioning today – that is government money. All these other four have dried up.