- Nigeria have suffered consecutive negative growth and are economically experiencing a recession.
- These are the seeds of recession, planted and nurtured between 2013 and 2014.
These were words of Nigeria’s Minister of Power, Babatunde Fashola used to describe ex-President Goodluck Jonathan’s led administration.
Fashola did not mince words when he said that the economic recession in Nigeria is not what the Buhari administration has done, it is a result of the profligate fiscal policy between 2010 and 2015′ which covers the period of GEJ’s administration.
In his speech on Saturday, at a forum organised by the Nigeria Infrastructure Advisory Facility (NIAF) in London, Fashola said:
“Today Nigeria face challenging economic times. The commodities boom is gone. We have suffered consecutive negative growth and are economically experiencing a recession.
“Why? the reason is simple. It is not what the Buhari administration has done, it is a result of the profligate fiscal policy between 2010 and 2015, when we not only under-budgeted (N4 trillion) in the face of deficient infrastructure, we also compounded it by providing 15 per cent for capital expenditure, which was under-funded and 85 per cent for recurrent, which we adequately funded.
“If infrastructure drives growth as we have experienced from the great depression to the Marshall plan, and lately fiscal stimulus in recent years, our current economic recession is the result of yesterday’s policies and choices especially during 2010- 2015.
“Sometime in March 2015, a little over a year ago, before the Buhari government, a snap survey of four construction companies which I constructed revealed that they had laid off 5,150 workers because government was not paying these construction companies for work done.
“Since my assumption of office, in the ministry of power, works and housing, meetings with contractors in power, works and housing reveal that contractors have been owed 2 to 3 years. These are the seeds of recession, planted and nurtured between 2013 and 2014. The Buhari government knows the cause, and has designed the proper solution: fiscal stimulus and capital spending.”
The Minister informed that since the 2016 budget was passed, construction companies that had been demobilised from their sites and laid off workers due to lack of payment since 2014 (GEJ’s administration), are re-mobilising to rail, road, power and other construction sites, and are re-calling workers.
According to Babatunde Fashola, those are the first signs of productivity which he believes, signal a clear pathway out of recession. He also said that although results take time to manifest, Nigeria has chosen an appropriate pathway out of economic difficulty.