The International Monetary Fund (IMF) has explained why economic diversification is important to Nigeria and critical for its economic recovery.
This is as it says that Nigeria’s export structure has not fundamentally changed over the decades, with crude oil still accounting for about 90% of the country’s export earnings as they did in the 1970s.
This disclosure is contained as part of the IMF’s statement in its latest economic assessment of Nigeria, Africa’s largest economy, where it says that successful economic diversification requires trade openness and competitive discipline.
The international multilateral organization stated that the limited gains from inward-oriented policies in terms of creating jobs and improving living standards suggest that Nigeria needs to have a change of strategy. It pointed out that in order to accommodate a growing number of young people entering the labour market, Nigeria will need to create at least 5 million new jobs each year over the next decade.
The IMF said based on the experience of other countries, embracing more open trade and competition policies would help diversify the economy and reinvigorate growth, particularly as the African Continental Free Trade Area takes effect.
It also pointed out that the experience of Malaysia, Indonesia, and to some extent India has shown that a shift toward export-oriented industrialization can boost GDP. The IMF states that the real GDP growth per capita of Nigeria has lagged behind compared to Asian economies that have adopted export-oriented policies.
Why this matters
- As a matter of urgency and priority, the diversification of Nigeria’s economy is the only viable way to survive the current environment of global economic uncertainty especially with the volatility of oil price.
- The country’s over-dependence on oil for about 90% of its export earnings appears unsustainable as no country can depend on one economic sector for its development.
- This is even more important now as the global economy is also undergoing some structural changes that will affect demand for Nigeria’s oil, leaving oil-dependent countries more vulnerable.
What you should know: Recently, the International Monetary Fund (IMF) advised the Federal Government on how it can raise more revenues to ensure a more sustainable fiscal position. The Brettonwood organization also stated that Nigeria has one of the lowest revenue levels as a share of GDP globally.
Senate endorses ex-Service Chiefs as Non-career Ambassadors
The Senate has confirmed President Buhari’s nomination of the immediate past service chiefs as non-career ambassadors.
The Nigerian Senate has endorsed the nomination of the past serving Military Service Chiefs as Non-career Ambassadors.
This was confirmed during Tuesday’s plenary session and announced in a social media statement by the Nigerian Senate.
Their confirmation follows the consideration of the report of the Senate Committee on Foreign Affairs, Chaired by Senator Adamu Bulkachuwa.
According to reports, the Senate Minority Leader Enyinaya Abaribe, however, questioned the nomination and confirmation of the ex-service chiefs when the Senate had on 3 different occasions called for their sack.
Senator Abaribe also raised issues on the petitions against the former service chiefs and questioned why they were dismissed without explanations.
But Senate President Ahmad Lawan dismissed Senator Abaribe’s concerns, ruling that the nomination of the former service chiefs cannot be nullified simply because the upper chamber had called for their sack, noting that this is totally a different assignment.
In his concluding statement, the Senate President, Senator Lawan added that these nominees that have just been confirmed have served this country to the best of their abilities. He appealed to the executive to make sure they use their experience as military men to the best.
“These nominees that we have just confirmed are nominees that have served this country to the best of their ability. Our appeal to the Executive is to make sure they use their experiences as military men to the best,” Lawan said.
Lawan, on behalf of the senate, wished them a very successful career in their capacity as Non-Career Ambassadors.
What you should know
- Recall Nairametrics reported earlier this month that President Muhammadu Buhari nominated ex-Service Chiefs for Senate approval as non-career Ambassadors-Designate.
- Their appointment came barely a week after their retirement as service chiefs and their replacement with new ones.
- This led to a spate of criticisms from some Nigerians who felt that the nation’s security situation got worse under their watch.
- They were reported to have tendered their resignation from their positions amid heightened calls that they should be sacked due to the increasing rate of insecurity across the country.
2020 budget performance: FG achieves 89% capital release in December 2020
The Minister of Finance has revealed that the FG achieved 89% release of the capital component of the 2020 budget to MDAs as of December 2020.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, has revealed that the Federal Government achieved 89% release of the capital component of the 2020 budget to Ministries, Departments and Agencies (MDAs) as of December 2020.
She said that the 89% capital funding for MDAs was achieved with the release of N1.74 trillion.
According to a report by the News Agency of Nigeria (NAN), this disclosure was made by Ahmed at an interactive session with the leadership of the National Assembly on Monday, February 22, 2021.
She also revealed that the government had disbursed N118.37 billion for Covid-19 capital expenditure from the fund.
What the Minister for Finance is saying
Ahmed said the Nigerian economy faced serious challenges in 2020, with the macroeconomic environment significantly disrupted by the Covid-19 pandemic.
She said this led to a 65% drop in projected net 2020 government revenues from the oil and gas sector, which adversely affected foreign exchange inflows into the economy.
On the delayed release of funds to implement the 2020 capital budget until March 31, the Minister said the complaint had decreased.
She said, “I think the complaint was earlier in the year when we were trying to transfer the balances. As far as I know, in the past three weeks, I haven’t heard any such complaints and we have been able to address them.
“But when we started the transfers, we couldn’t transfer to some agencies because of some limitations in the system, but we have since been able to transfer the capital component that is being utilised by the agencies budget to the system.”
While pointing out that the implementation of the MDAs projects was tied to procurement processes and capacity of the MDA, Ahmed also said the extension of the 2020 capital budget implementation to March 31 had recorded 30% performance as at January.
However, Ahmed said that she expected that the extension would record 100% performance in March.
Speaking during the interaction, the Senate’s Chief Whip, Senator Orji-Uzor Kalu, commended the Minister on the capital performance of the 2020 budget.
He said, “I want to commend the minister and her team because this is the first time in the history of Nigeria that by December 31, we are having 89% performance expenditure of the budget. It has never happened before; Last year was the very first.
“The budget had been going 49%, 27%; this means from what the Senate President was asking, it means by March, we should be looking at implementing the budget 100%.’’
Earlier, President of the Senate, Ahmad Lawan said the meeting was to get an update on the capital implementation of the 2020 budget given its extension for implementation by the national assembly to March 31.
What this means
- The 89% capital release for the 2020 budget as of December 2020 is quite encouraging as it occurred despite the economic challenges and disruption caused by the outbreak of the coronavirus pandemic.
- There seems to be an improved effort by the Federal Government at the budgeting process with the early passage of the 2021 budget and the implementation of the capital component of the 2020 budget.
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