The Federal Government of Nigeria remains hopeful of an economic revival, its finance minister said, even as the country slides into recession, reports FT.
Low global oil prices have helped push Africa’s biggest economy into its worst economic crisis in decades. But many economists believe policies adopted by the central bank during the first year of Muhammadu Buhari’s presidency exacerbated the problem.
Gross domestic product shrank 0.4 percent in the first quarter while second-quarter growth figures — expected this week — are expected to reflect a deepening crisis due mainly to lower oil receipts amid militant attacks in the Niger Delta.
Kemi Adeosun, the country’s finance minister, told the Financial Times that the government did not dispute the IMF’s forecast last week that the economy would contract 1.8 percent. “We’re simply saying that we have a very credible plan for dealing with the challenges we are facing, which we’ve been very honest about,” she said.
Although Adeosun thinks “there is still a long way to go”, the government is convinced that “diversifying and repositioning” the oil-dependent economy will bear fruit.
Part of that diversification includes the agricultural sector, where a boost in output is expected this year. “Aggressive” management of food price inflation, which includes low cost loans to farmers and improved distribution of fertiliser, will help bridge the shortfall in oil revenues.
The Buhari administration’s strategy also envisions heavy spending on infrastructure projects to jump-start growth.
Adeosun, a former investment banker, said the delayed passage of the 2016 budget had stalled the start of those projects to the fourth quarter. By then, she said, Nigeria would have secured funding from abroad for the record N6.1 trillion ($21.4 billion) budget, quashing concerns that funding would not be available in time for the projects to begin this year.