National Bureau of Statistics
Says pressure on naira may persist Buhari: With ongoing anti-corruption crusade, Nigerians will see a difference in the economy
James Emejo in Abuja,
Says pressure on naira may persist Buhari: With ongoing anti-corruption crusade, Nigerians will see a difference in the economy
James Emejo in Abuja,
James Shiklam in Kaduna and Ibrahim Shuaibu in Kano
Inflation may further rise to 10.16 percent by year end and then ease to 9.01 percent over the period of 2017 to 2019, the National Bureau of Statistics (NBS) has said.
Inflation is currently at 9.6 percent.
The statistical agency in its latest report on "The Nigerian Economy: Past, Present and Future" posted on its website also said speculative pressure on the Naira was likely to persist in 2016 in light of the current state of foreign reserves.
But in the United Kingdom where he is currently on vacation, President Mohammadu Buhari said with the ongoing war against corruption and the recovery of looted public funds, Nigerians would see a difference in the nation's economy.
The NBS said GDP growth is expected to increase to 3.78 percent this year from 2.97 percent in 2015 and 5.61 percent by 2019.
It predicted that total trade will increase on the margin by 2.41 percent, as imports and exports increase by 2.88 percent and 2.16 percent respectively.
The NBS report stated that beyond 2016 however, growth was expected to jumpstart averaging 5.41 percent yearly between 2017 and 2019 as infrastructure developments take shape and provide support for both the oil and non-oil sectors.
"While upward pressure on inflation is expected, meaning that the Headline index may rise from 9.55% to 10.16% in 2016, rates are expected to moderate beyond this period and average 9.01% between 2017 and 2019. The value of total trade is expected to slow in 2016, increasing by 2.41% as a result of moderations in imports and exports. Beyond 2016, both import and exports are expected to increase and total merchandise trade is expected to Average 15.61% growth during the period," the report stated.
The NBS further stated that the proposed N1.6 trillion to be invested in capital projects and other initiatives, particularly in Power, Works and Housing, were likely to have positive impact on the economy.
"In addition, the establishment of the Efficiency Unit to identify and surgically eliminate inefficiencies without hampering productivity is also another development. In the near term, the reset may not yield fruits as quickly as Nigerians expect," the NBS report stated.
It further said, "government is using the 2016 budget as an opportunity to reset and redirect the macroeconomic dynamics of the country. The attempt to consolidate expenditure using the Treasury Single Account to plug leakages (even if this is only at the federal level) is a welcome first step."
Continuing, it noted: "While administrative measures will help provide some cover, the downside risk of such measures is that by making imported goods more difficult to obtain, they increase the price of such goods, leading to higher inflation.
"We expect that the Central Bank’s adjustment of the foreign exchange management framework will be steady in the year and will thus mean a gradual easing in prices beyond 2016. Over the 2017 to 2019 period, Headline inflation is expected to average 9.01%."
Noting that the 2017 to 2019 period is expected to reap the benefits of the extra N1.6 trillion into capital expenditures in the 2016 budget, it said, “In particular, plans by the government authorities to increase power supply by developing critical infrastructure to transport gas to the power plants in order to add 2,000 MW to the country's stock of power within the next 12 to 15 months will have multiple effects on both the manufacturing and services sectors.
Other measures expected to spur growth, according to the NBS report, include fiscal measures such as the implementation of the Treasury Single Account (TSA), improvements in tax collection efforts and the creation of an Efficiency unit in the Federal Ministry of Finance to ensure that scarce resources are adequately deployed.
“Over the 2017 to 2019 period, growth is expected to average 5.42%," it added.
Meanwhile, in an interview with the Hausa Service of the British Broadcasting Corporation (BBC), President Buhari who is currently on vacation in the UK admitted that the Nigerian economy was facing challenges noting that the falling prices of oil which is Nigeria's main source of income had gone beyond expectations.
He however said that with his administration’s crusade against corruption and recovery of some looted funds, Nigerians should expect to see a difference at the end of the year.
The President also spoke on the ongoing campaign against terrorism.
The BBC 4:04pm interview monitored by THISDAY run thus:
BBC: Boko Haram is killing people and you said you have defeated them.
What I said is that we have reduced their strength. Before now, they were in control of 14 local governments (in the north east). We have 774 local governments (in Nigeria), they (were) hoisting their flags in those local governments during that time. But now they are not in control of any local government. The military told me this and I believe them.
But they (Boko Haram) went and learned one type of terrorism, using bombs to kill people in churches, mosques, markets and motor parks....
They will shout allahu akbar, Boko haram has no relationship with Islam. They are not Muslims.
BBC: Since you were sworn in as President, the Nigerian economy, especially the price of oil has fallen and then there is this effort on war against corruption. Do you think the Nigerian economy is in a serious problem?
That is the truth! In the past 16 years, the country was ruled by… governments of the PDP. During that time, the price of oil was 140 to 180 dollars per barrel. But as we came in the price fell to 30 dollars or less than that. Of course oil is our only major source of income. Therefore, we have problems, but since we are stopping corruption and we are recovering some of the things that were stolen, Insha Allah, at the end of this year, Nigerians will see a difference.
BBC: Many people are saying that the way out of the problem is to devalue the naira. You said up till now nobody has convinced you on the need to devalue the naira, but the former governor of Central Bank of Nigeria ( CBN ), Charles Soludo, has spoken, another former CBN governor and emir of Kano, Sanusi Lamido Sanusi, has also spoken, giving the same advice. Do you mean you don't agree with them?
I don't agree with them. My reason is that those who are spending or reducing the value of their currencies are developed countries like America, Canada and Europe. If they reduce the prices of their products, other countries will buy many of their products.
In Nigeria, what do we produce to sell? If you kill the naira, industrialists will not be able to operate because they will need enough naira to buy machines abroad. We don't manufacture machines.
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