FG Needs $5b To Stabilise Economy – Okonjo-iweala - Politics - Wabsodlink

Co-ordinating Minister of Economy and Finance Minister, Dr. Ngozi Okonjo-Iweala, on Monday said Nigeria needs about $5 billion to stabilise the economy. She made the assertion at a closed door meeting with Senate Joint Committee on Finance and National Planning. The Minister who was in company of the Central Bank Governor, Godwin Emefele; the Director of Budget, Dr. Bright Okongwu; GMD NNPC, Dr. Joseph Thiama Dawha, to brief Senate committee on perimeters guiding the operation of the 2015 budget in line with the 2015-2017 Medium Term Expenditure Framework and Fiscal Strategy Paper, said Nigeria is not broke. “We have calculated that in order to help us regain this stability, we need a minimum of about $5 billion and anything about that is good. The IMF actually calculated $6.3 billion to be maintained in that account. “It helps to cushion our exchange rate, so if we go and withdraw it abruptly beyond that amount it causes a problem and you know we went down to $2 billion last year and then we built it up to $9 billion and there was insistence we must share, it came down to $2 and then we had at least built it back to $5. Right now we are at $4.1 billion,” she noted The Minister further added: “If we had built it to a stable cushion then anything above that we could now use to augment and that is the reason why we have not seen that, we have to balance out everything and I think Nigerians care so much about exchange rate. If you have abrupt changes, that will also affect the psychology of Nigerians, inflation and all that.” She said every country faces a certain amount of risks and uncertainty at different times, so it is how one manages it that is a problem. “Are we prepared with a list of measures that can help us manage any of these outcomes, have we thought through the various scenarios to say if anything happens, here are the things to recommend? If we have those scenarios and manage those things, then we will be able to manage the economy,” stated. She, however, admitted that though the economic situation is hard, Nigeria can still manage the situation. “Yes, at the present time, we are reasonably stable compared with other countries but if those risks materialise, we need to have action in order to keep the economy stable,” she reiterated. On the insinuations in some quarters that Nigeria is broke, the Coordinating Minister described them as false, saying they were absolutely not correct since the country has sufficient assets to cushion the effect of the harsh economic realities. “However, that does not mean that we cannot have some cash flow fluctuations, we just have to manage it because we have an economy that is reasonably self-sufficient. We are able to manage ourselves well and if everybody is willing to do a few things, we should be able to get there,” she noted. On the adoption of $78 pb benchmark for 2015 budget, she simply asked, “Is the present budget likely going to be tenable or a workable budget? “My belief is, no matter what is settled on at this point in time, what is pleasing and brings us all together is the realisation that what we were trying to say a few years ago has happened and it is happening in front of us and all of us need to come together to find a solution. “Whatever the decision will be, even if we agree on another benchmark, we still need measures to be in place because we have no idea whether it is going to go. “So I think we need to prepare ourselves in two or three scenarios and we can share some of the scenarios that we have been thinking about that will guide our development of those contingency measures. “I think that the excess crude account was built to be able to cushion us at times like this, when we have some kind of difficulties and I think it played that role to perfection during the crises of 2008, when oil fell to 38 to 40 dollars per barrel, even worse than what we have now. At that time, we still had saved up quite a lot of money as such we were able to draw at least for a quite a few months to carry the economy, “she stated. She appealed to the Senate committee to assist the Executive Arm overcome some of the challenges it was going through in the course of balancing the hard economic situation the country finds itself. “So we need the help of the National Assembly, we cannot do it without you. If we get together we can take care of some of these issues so that it might result in immediate upfront cost .” Daily Independent source revealed that the Senate joint committee at the end of the closed door meeting accepted the proposed $78pb benchmark for the 2015 budget. The Chairman, Senate Committee on Finance, Senator Ahmed Markafi, who declined to comment on the outcome of the meeting in a telephone interview simply said Senate would be briefed on the outcome of the meeting at plenary at an appropriate time. Meanwhile, the House of Representatives has declared that the Nigerian economy is under financial siege following the inability of the Executive Arm of Government to implement the National Budget as passed by the parliament. The lower parliament has also indicated that the Service-Wide-Vote being unilaterally managed by the Executive will soon be scrapped through the instrumentality of law. Chairman, House Committee on Public Accounts, Solomon Adeola, who made the disclosure in an interview with House of Representatives Correspondents said further that the parliament had resolved to summon the Minister of Finance and the Coordinating Minister of the Economy, Mrs. Ngozi Okonjo-Iweala, and Director General of the Budget Office, Bright Okogwu, to find solutions to the problems bedeviling the economy.