Nigerian Economy is Doing Well – Okonjo-Iweala

Nigerian Economy is Doing Well - Okonjo-Iweala
Nigeria’s Finance Minister Okonjo Iweala

AFRICANGLOBE – Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, yesterday, replied to critics of Nigeria’s Federal Government’s economic growth claims, saying that the nation needed Gross Domestic Product, GDP, growth for the economy to impact positively on the people.

Lagos lawyer, Femi Falana, had, last week in Abuja, told the House of Representatives that the impact of the economic growth claimed by Federal Government was not being felt by Nigerians.

Speaking at the Ministerial Platform in Abuja, Dr. Okonjo-Iweala explained that Nigeria’s economy was strong, stable and growing at 6.75 % GDP, which had been recognised by international rating agencies such as Fitch and Standard and Poor that upgraded Nigeria’s rating at a time many developed economies were being downgraded.

Importance of GDP Growth

She said: “Nigeria’s macro-economy is strong and stable. Our GDP is growing at about 6.75 per cent and some people say that they don’t see the impact. We are doing well.

“That does not mean that you have solved all the problems, but without that growth you can’t start solving the problems of this economy.

“GDP is nothing but the income of the country. Growing GDP matters. If the income does not grow, you will suffer more and more. Don’t listen to those who are saying that growing GDP does not matter.

“I want Nigerians to know that growing the GDP matters so much. We need to grow our GDP up to eight percent. It is time that Nigerians don’t get deceived that growing the GDP doesn’t matter.”

Okonjo-Iweala debunked reports that the Federal Government had taken a new decision to sign on private firms for the Destination Inspection Scheme.

On Exchange Rate, Foreign Reserves, Crude Account

The minister said that the dollar exchange rate had been stable at between N155 and N160 over the last two years, while inflation rate had slowed to 9.1 percent from 12.4 percent in May 2011.

On the external reserves, the minister revealed that the administration grew it from $32.08 billion in May 2011 to $48.4 billion as of May 2013.

The excess crude account, she added, rose from about $4 billion in May 2011 to around $9 billion at the end of 2012, and about $6 billion in May 2013.

Okonjo-Iweala said: “ECA is now helping us since oil production has fallen from the projected 2.53 million bpd to between 2.1 to 2.2 million bpd.”

On the cost of running government, she said that the Federal Government has been vigorously pursuing the policy to reduce recurrent expenditure and complete unfinished capital projects.

She said that this decision informed the reduction of recurrent expenditure from 74.4% of total budget in 2011 to 68.7% in 2013 and that it would be sustained until more funds were made available for capital projects.


The minister added that the Integrated Payroll and Personnel Information System, IPPIS, was paying off as it had enhanced efficient personnel cost planning and budgeting as personnel cost would be based on actual verified numbers and not estimates.

According to her, 215 MDAs (153,019 staff) have been captured on IPPIS as at January 2013, with savings on payroll cost to date put at N118.9 billion.

She said that work was ongoing to bring in other 321 MDAs not yet on IPPIS.

The ministry, she also said, has been working to assist operators of the real sector of the economy to source funds from international windows, revealing that her team negotiated financing agreements totaling $12 billion in that regard.

The funds, which were mainly from the World Bank, China Exim Bank, African Development Bank and the Islamic Development, were for various projects in agriculture, power, transportation, health , water and ports.

Sources of $12bn

They included N30 billion credit risk guarantee to Nigeria’s commercial banks to support the supply of fertilizers and seed by the private sector; US$200 million to support the ATA for staple crop processing in the six geo-political zones; US$300 million support to Fadama and commercial agriculture.

Others are China Exim Bank’s $500 million for importing 18 cassava processing mills and 40 rice processing units (under discussions); and $4 billion letter of credit to support investment in the Lekki Deep Sea Port.

$1 billion Eurobond (including US$600 million for gas to power) to be launched; China Exim Bank $765 million Zungeru Hydroelectric Power Project; and another Islamic Development Bank’s $54.5 million for the same Zungeru Hydroelectric Power Project, were also listed.

The minister reiterated the determination of the Federal Government to keep the nation’s debt low, revealing that debt stood at N6.49 trillion. External debt was N1.04 trillion or about $6.7 billion.


By: Emma Ujah