Recession: FG to leverage PPP to augment scarce resources- Buhari

As part of efforts to bring the country out of recession, the federal government will leverage on Public Private Partnerships (PPP) amongst other options to augment the country’s scarce budgetary resources to fast-track investments in critical infrastructure, President Muhammadu Buhari at an emergency retreat on the state of nation’s economy on Thursday.

This, he said informed the inclusion of key non-spending agencies, such as the Infrastructure Concession Regulatory Commission (ICRC), the Bureau of Public Enterprises (BPE), the National Sovereign Investment Authority (NSIA) and the National Pension Commission (PENCOM), in the one day retreat on strategies to bring the country out of recession.

He disclosed that the government had decided to focus on some critical areas of the 2017 budget and this will result in a review of capital allocations for some ministries as some will get more and others less than they got under the 2016 budget.

“This deliberate inclusion underscores the commitment of this Administration to leverage on private sector resources, through Public Private Partnerships (PPP) and other arrangements, in order to augment the scarce budgetary resources at our disposal and to accelerate investments in building critical infrastructure.

“In this regard, let me inform you that because of the need to focus on our key priorities, some Ministries may get significantly less capital allocation than they received in 2016, while others may get significantly more,” the President said at the end of the first session of the retreat.

Noting that his administration will continue to strategize on how to turn the current challenges into opportunities for the nation, the President called for the support and cooperation of “private sector’s domestic and foreign investors, the States and Local Governments, the National Assembly and the Judiciary as well as all well-meaning Nigerians in this important task. We are confident that working together, we shall succeed”.

He challenged members of his cabinet to think out of the box in finding solutions that will get Nigeria out of the current economic recession adding that Nigeria’s situation needed an out of the box approach that will involve meaningfully engaging with the private sector to raise the level of investment in the country.

The one day retreat which held at the State House conference centre, Abuja, with the theme ‘building inter-ministerial synergy for effective planning and budgeting in Nigeria’ also considered priority areas for the 2017 Budget.

Buhari said he expected his cabinet members and other stakeholders at the retreat to come up with practical solutions on the way forward to set prioritized projects and programmes that will fit into the 2017 Budget.

The Retreat is coming at a critical time in the economic history, when the Nigerian economy is in a recession, with significant downturn in the performance of various key sectors.

The country slid into a recession after a contraction of 0.36 and 0.26 percent respectively for the first and second quarter of the year.

Inflation in Nigeria which was a single digit between Q1:2014 and Q4:2015 has risen to double-digit. Also, unemployment figures have been rising consistently in 2016. This has led to calls for various interventions by the government to stem the free fall of the economy.

On the other hand, experts who made presentations at the technical session of the ongoing one-day retreat on the economy also tasked the Buhari led government to be bold about its decisions.

According to Minister of Information, Lai Mohammed told newsmen that the experts who made presentations during the closed session with the President advised the government to be bold and also consider the option of spending out of the recession.

“What the experts have been saying is that we must be bold, we must think out of the box and we must look at the only one solution to recession which is spending out of recession. The spending out of recession does not necessarily mean spending on recurrent but you spend on capital projects receive the economy and put money in the hands of the people” he said .

Managing Director and Chief Executive of Financial Derivatives Company Limited, Birsmark Rewane, who made a presentation on Monetary and Exchange Rate Policy options to get the economy out of recession in an interview with select journalists after the session said there were no quick fixes to the country’s economic situation as it may take the country about 12-18months to get out of the recession.

“The question is what do we do? that is what the Nigerian public want to hear, the public is tired of what caused it and they want to know what next and how soon they will see a light at the end of the tunnel.

“To us, this is a U-shaped recession which means that it is going to take us about 12-18 months to get out of it before we begin to see signs. With some luck it could probably start earlier, well I don’t think anybody should be deceived that there is going to be a silver bullet or a quick fix. There is work to be done and there are scarifies to be made” Rewane said.

Experts including Obadiah Mailafia, Ayo Teriba, and Bode Agusto also made presentations during the closed technical session with the President.

They made presentations on Weaning the Economy out of oil dependence; Fiscal and Trade Policy options to get the economy out of recession; and How to grow output and productivity in the Real Sector, respectively.

 

 Elizabeth Archibong