Abuja — It is now official, the Nigerian
economy, which overtook South Africa to
emerge as the largest in Africa in 2014, is
now in recession, the federal government
finally declared yesterday.
The Minister of Finance, Mrs. Kemi
Adeosun, who made this disclosure while
briefing the Senate yesterday on the state
of the nation’s economy, was however
emphatic that the recession was technical
and would be short-lived.
Buttressing the point, her counterpart in
the Ministry of Budget and National
Planning, Senator Udoma Udo Udoma,
who briefed State House correspondents
after the 69th meeting of the National
Economic Council (NEC), said the
economy was “technically in recession”,
adding however that it would start to grow
by the end of the third quarter of 2016.
The recession, notwithstanding, Adeosun
was confident that Nigeria would come
out stronger in view of the policies and
programmes that the government had put
in place to address the downturn.
She also confirmed that fuel subsidies
had been totally eliminated, adding that
the petroleum products in the country
were now market-driven, as the subsidy
removal by the government had paved the
way for healthy competition among oil
“Is Nigeria in recession? Technically, if
you go into two quarters of negative
growth. Technically, we are in recession
but I don’t think we should dwell on
definitions. I think we should really dwell
on where we are going.
“I think if we are in a recession, what I
will like to say is we are going to come
out of it and it will be a very short one
because the policies that we have will
ensure that we don’t go below where we
need to go and I think with what we are
doing, we will begin to turn the corner by
the third quarter.
“I can confirm there is no more subsidy.
It is a market-driven price and indeed,
one of the good things that we are now
seeing is that prices have actually been
coming down.
“There is now competition between filling
stations for market share which is a good
thing, which means overtime, the market
will continue to correct itself,” she said.
Adeosun also disclosed that Nigerians,
before the removal of the subsidy,
consumed 45 million litres of petrol a day,
but consumption has now dropped to 26
million litres a day, a situation she said
had provided the platform for the
government to make reasonable savings.
“If you look at what is happening in the
petroleum sector before the subsidy
removal, we were subsidising around 45
million litres of fuel a day.
“Now, without subsidy, usage has
dropped to 26 million litres. So what does
that tell you? All the smuggling that was
going out of the country based on the
subsidy that we were providing has
stopped. Those are real savings to the
economy which we are now redirecting
into essential infrastructure that will get
this economy going,” she explained.
The minister also told the senators to
ignore the recent projections from the
International Monetary Fund (IMF) that
the Nigerian economy would be
vulnerable to global shocks.
According to her, IMF projections were
not necessarily in tandem with reality,
insisting that she remained confident in
the potential of the Nigerian economy to
weather the current economic crisis.
“I am not too worried about IMF
projections. I will tell you why: The IMF,
one of its functions is global economic
surveillance. They equally issued a
negative report on Britain as a result of
“But I don’t think we should panic every
time IMF speaks. I think we need to be
confident about what we are doing and
where we are going. I remain extremely
confident as I said.
“IMF has given its projections which is
that we may continue to go into negative
territory and I am not sure what we have
seen suggests that.
“Agricultural output seems to be going
up… That tells you that things are moving
in the right direction,” she said.
Adeosun, however, evaded questions on
the amount left as reserves by the
administration of former President
Goodluck Jonathan. Instead, she said as
the Minister of Finance, she inherited
negative reserves.
Submitting that there was a joint venture
cash call debt of $5 billion that are
outstanding to international oil
companies, Adeosun, however, said the
federal government had released N248
billion for capital projects provided in the
2016 budget as part of efforts to get the
economy going.
She added that contractors being owed
by the government had been paid N107
billion out of the outstanding N390 billion
they were owed since 2012.
She also disclosed that N74 billion had so
far been released for road construction to
the Power, Works and Housing Ministry
from the 2016 budget compared to the
N19 billion released for the purpose last