MOTION: AN URGENT NEED TO ADDRESS THE PRESENT ECONOMIC STATE OF THE NATION.
Sponsor: SENATOR BASSEY ALBERT AKPAN
(AKWA IBOM NORTH-EAST SENATORIAL DISTRICT)
Aware that the National Bureau of Statistics (NBS) last week released the nation’s economic scorecard for the first quarter of the year 2016 for Gross Domestic Product(GDP), Inflation and Unemployment;
Observes that the report depicts that the nation’s economy plunged into recession with a decline of 0.36 per cent year-on-year in real terms which is a drastic drop from 2.11 per cent in Q4 2015 in GDP;
Further Observes that from the report,unemployment rate rose to 12.1 per cent in Q1 2016 from 10.4 per cent in Q4 2015. Underemployment also increased to 19.1 per cent from 18.7 per cent in the same period while the rate of inflation rose from 9.6 per cent in January 2016 to 13.8 per cent in April 2016 with the attendant increase in prices of basic food commodities and services in the country;
Worried that the declining Gross Domestic Product (GDP) and unemployment besides the current high inflation rate clearly show that the economic policies are not achieving desired impact and requires an urgent review to avoid further plunge in our economy;
Further worried that the current economic contraction is the first major drastic slump since June, 2004, which according to the Central Bank of Nigeria is a 12-year-low while the World Bank’s position is a 21-year-low;
Recalls that the Central Bank of Nigeria had in March 2016 deployed a contracting monetary policy increasing benchmark interest rate from 11% to 12% and cash reserve ratio from 20% to 22.5%. The question is: why contracting monetary policy instead of expansionary monetary policy of boosting economic activities at such a critical time as this;
Deeply concerned that the continued complacency of the current state of our economy if allowed unchecked will set the tone for a full blown economic recession by the end of June 2016 as already confirmed by the Central Bank of Nigeria in her Monetary Policy Committee(MPC) meeting of yesterday;
Disturbed that the current economic situation in the country coupled with lack of required foreign exchange to boost imports of raw materials for our domestic industries will worsen the unemployment and poverty situation in the country;
Considering the decline in oil production in the Niger Delta by 800,000 b/d viz a vis the benchmark production for 2016 budget of 2.2mb/d, owing to the vandalisation of oil pipelines, in addition to the inability of non-oil revenue collecting agencies to meet our revenue targets owing to the economic crunch;
Convinced that with the current economic slump, meeting the key budgetary revenue projections of the 2016 budget is practically impossible and the need to have a rethink to avoid deepening budget deficit or poor budget implementation.
i To invite the Minister of Finance and the Governor of Central Bank of Nigeria to brief the Senate on the Monetary/Fiscal policies adopted to salvage the current economic situation.