The Minister of Budget and National Planning, Senator Udoma Udo Udoma ,while speaking to a global audience in Indonesia on Thursday said Nigeria’s economy is moving in a positive direction following the implementation of the Economic Recovery and Growth Plan (ERGP 2017 – 2020)
Speaking at the presentation of the International Monetary Fund (IMF) Regional Economic Outlook Report for Sub-Africa, Sen Udoma, said actions taken since the launch of the Plan in early 2017 have helped to build buffers and appropriate measures to safeguard the economy from any external shocks.
While recalling that the collapse of crude oil prices reached its peak in 2014, which led to the country’s economy sliding into recession in 2016, government developed a robust Medium-Term Plan – the ERGP, which was launched in early 2017, which focuses on five strategic areas: Macroeconomic Stability, Economic Diversification and Growth Drivers, Competitiveness, Social Inclusion and Jobs, as well as Governance and other Enablers.
The Minister said the positive trends recorded in the country’s economic indicators since the launch of the ERGP indicate that the Plan is working. Among others, he listed that:
– We have been able to bring down inflation from 18.7% in January last year to 11.2% by August this year. Our aim is to bring inflation down to single digits by the end of the Plan period in 2020.
– The exchange rate market has been stabilized through the introduction of the Investors and Importers foreign exchange window. We have also been able to build up our external reserves from $27 billion in 2016 to $43.9 billion by early this month.
– Our current account, as a ratio of GDP, has moved from a deficit of 3.2% in 2015 to a surplus of 2.8% by end of last year. And this is built on export growth, including significant growth in non-oil exports, that has resulted in the country recording a consistently positive trade balance since the fourth quarter of 2016.
– The ERGP targets both oil and non-oil. With specific reference to the oil sector, it would be recalled that due to disruptions by militant activity, at some point in 2016, oil production was as low as 1 mbpd.
Through positive engagements with the communities in the Niger Delta, we have improved the environment for oil production. Apart from technical hitches, from time to time, we are now able to produce up to 2 mbpd and take advantage of the more favourable international oil prices. Our target is to produce 2.3 mbpd.”
He pointed out that the implementation of the various initiatives in the Plan resulted in moving the country’s economy out of recession to a positive growth path. “Our GDP grew from -1.6% in 2016 to 1.5% by the second quarter of this year, with the non-oil sector growing at 2.05% – the highest growth in the sector since the fourth quarter of 2015”.
He was confident that the country’s growth projection of 2.1% by the end of the year will be realized. Noting that the IMF’s projection for Nigeria is 1.9% this year, slightly lower than Nigeria’s projection, the Minister however pointed out that given Nigeria’s growth for 2017 which was only 0.8%, even if Nigeria achieves the IMF projection of 1.9% this year, it is a significant improvement on the 2017 numbers.
The direction of movement in Nigeria is clearly very positive. “As you have seen, these actions that we have taken have helped us to build buffers and appropriate measures to safeguard us from any external shocks,” he stressed.