Senate President: Recovery from recession fragile

Senate President Bukola Saraki has described Nigeria’s recovery from economic recession as fragile, adding that the fundamentals underlying the recovery remain weak.

In a speech, which was meant to be delivered at the budget presentation by President Muhammadu Buhari to the National Assembly, Saraki said: “Without doubt, the last three-and-a-half years have been eventful ones at the global level and in our domestic economy. From dips in oil prices to major shifts in the economic landscape, crude oil production shut-ins and security challenges, the economy and Nigerians have been directly impacted by these events.

“Many businesses closed down and many people lost their jobs during the recent recession. In the same period, we lost innocent citizens to insurgency in parts of the North East, thousands were displaced, and many lives also lost due to clashes between farmers and herders, in addition to the general hardship unleashed by unstable economic winds.

“These are some of the security challenges we have faced. We must take them head-on; it is a battle we must win as a country. It must be admitted that we are not there presently. For one, these security challenges now pose a threat to the viability of the agricultural sector.

“This is clear in the marked reduction in agricultural output observable since the first quarter of 2018. There is the need for more efforts by all. We here are prepared to give all necessary support to the Executive. We stand ready and committed to assist in every way we can, in order to ensure food security and the protection of lives and property”.

He bemoaned the under-performance of independent revenues, saying it is straining government’s ability to meet its expenditure, especially investments in critical infrastructure.

This, he said, further exposes government to higher deficit levels which have been largely financed by borrowing, stressing that there was urgent need to address the lapses.

“To be clear, two scenarios will play out if we do not deal decisively with challenges to revenue. These would be to accommodate higher debt with higher repayment costs, which is not sustainable or to reduce the capital budget, which would mean a slow-down in government investment in critical infrastructure. This, again, does not aid growth or economy development.

“Mr. President, it is for these reasons that the National Assembly required that the 2018 Budget proposal and future ones be accompanied by a Finance Bill, which would give credence to the financial proposals of government.

“It is one way of establishing credibility in projected revenues. It is imperative, therefore, that a 2019 Finance Bill is submitted to the National Assembly for consideration and approval.

“I have always stressed the importance of setting realistic revenue targets, because we cannot afford to rely on borrowing to finance recurrent expenditure. It is critical we shift focus to generating as much money as required for spending, at least for recurrent needs, so loans can be used solely to fund capital projects.”