Wednesday, November 6

Group calls on FG to shun Foreign Borrowing to fund 2016 Budget

…as Media Launches 1stEconomic Stakeholders Summit

By ODILI CHRISTEL

In order to distil a critical and realistic package that cuts across all the economic sectors which the government

is expected to integrate into its economic and development policy thrusts to ensure a lasting solution to the economic challenge bid and also bridge the gap created by the current decline in oil prices at the international market affecting the country’s economy, Group has called on Federal government to ensure strategic solutions are made to prevent total collapse of the country’s economy.

The chairman of the group, Dr. Austin Ngawamade made the call during a media chat with journalist at theflagging-off of activities for the 1st Nigerian Economic Stakeholders Summit slated to hold on the 25th and 26th of May 2016, with the theme “The Nigerian Economy: Navigating a Sustainable Landscape”, today in Abuja. He noted that the summit is being convened to bring together experts from all the sectors of the economy for a veritable talk shop to discuss, analyze and dissect the many challenges afflicting the economy with a view to pointing desirable way forward.

Dr. Austin Ngawa while giving his address stated that the revenue generation base of both the federal and state governments has shrunk making it too difficult for them to meet their recurrent and capital expenditure obligations.

According to him, ” this has placed extra pressure on them to diversify so as to shore up their income generation regime. The domestic debt has climbed to unprecedented N8trillion and still increasing , while the 2016 budget has huge burden of 2.2 trillion naira, implying that the government must explore the option of Foreign borrowing to be able to finance the budge. These significantly constitute added adverse impact on the economy”.

He noted that the sectors of the nation’s economy are in critical conditions, “some of the evidence based indicators include persistent slide in oil price at the international market. Understanding that oil is the mainstay of the economy; dwindling exchange rate of Naira against the international currencies (Naira is currently exchanged at 342naira to a Dollar): High inflationary trend and extraordinary unemployment rate”.

Dr. Austin also reiterated that besides banking and oil sectors are among other critical sectors currently facing unprecedented stress and threat banking sector’s challenge arose principally from government’s introduction of the Treasury Single Account (TSA) which has resulted to the withdrawal of public sector funds from the commercial banks to the Central Bank of Nigeria, and oil sector on account of the sustained slip of oil price and government’s new policy aimed at reviewing it’s joint venture agreement with the oil majors.

He noted that experts has raised issues on the growing fragility of the macro-economic environment warning of impending recession,  noting that fiscal decline has remained the order, while liquidity currency crunch which JP Morgan cited as reason to delisting Nigeria October last year from government bond index is still biting the economy. He explained that Nigeria now hardly meets the demands of genuine manufacturers and other businessmen for foreign currencies to import necessary products to sustain their enterprises thereby having negative impacts on the real sector and thus swelling the ranks of unemployment.

The chairman reiterated that to a large extent efforts have been made to secure government’s buy-in by procuring the endorsement of relevant committees of the National Assembly and other government agencies and Central Bank of Nigeria, stating that the outcome of the summit will be put together and forwarded to relevant government institutions for required integration into the national economic plan.

He urged for the support and partnership of relevant stakeholders to ensure the success of the forum which as well crucial to our survival as a nation. “This is on account of the critical place of the Media paradigm, cornerstone of media practice in democracy”, he said.

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