President Muhammadu Buhari has listed three major problems why Nigeria is currently plagued with recession.
The President in his 56th years independent anniversary broadcast message to Nigerians said Nigeria is in recession due to;
- Critical shortage of foreign exchange
- Oil price dropped from an average of hundred USD per barrel over the last decade to an average of forty USD per barrel this year and last.
- the damage perpetrated by Niger Delta thugs on pipelines
Buhari in his broadcast this morning said;
"All countries face ups and downs. Our own recession has been brought about by a critical shortage of foreign exchange. Oil price dropped from an average of hundred USD per barrel over the last decade to an average of forty USD per barrel this year and last.In stating what the government is doing to ameliorate the suffering of Nigerians and ease out of the recession, President Buhari said;
Worse still, the damage perpetrated by Niger Delta thugs on pipelines sometimes reduced Nigeria’s production to below One million barrels per day against the normal two point two million barrels per day. Consequently, the naira is at its weakest, but the situation will stabilize."
"But this is only temporary. Historically about half our dollar export earnings go to importation of petroleum and food products! Nothing was saved for the rainy days during the periods of prosperity. We are now reaping the whirlwinds of corruption, recklessness and impunity.
There are no easy solutions, but there are solutions nonetheless and Government is pursuing them in earnest. We are to repair our four refineries so that Nigeria can produce most of our petrol requirements locally, pending the coming on stream of new refineries. That way we will save ten billion USD yearly in importing fuel.
At the same time, the Federal Ministry of Agriculture and the Central Bank have been mobilized to encourage local production of rice, maize, sorghum, millet and soya beans. Our target is to achieve domestic self-sufficiency in these staples by 2018.
Already farmers in thirteen out of thirty six states are receiving credit support through the Central Bank of Nigeria’s Anchor Borrowers Programme. Kebbi state alone this year is expected to produce one million tonnes of locally grown rice, thanks to a favourable harvest this year. As part of the 13 states, Lagos and Ogun are also starting this programme. Rice alone for example costs Nigeria two billion USD to import.
The country should be self-sufficient in basic staples by 2019. Foreign exchange thus saved can go to industrial revival requirements for retooling, essential raw materials and spare parts. It is in recognition of the need to re-invigorate agriculture in our rural communities that we are introducing the LIFE programme.
Government recognises that irrigation is key to modern agriculture: that is why the Ministries of Agriculture and Water Resources are embarking on a huge programme of development of lakes, earth dams and water harvesting schemes throughout the country to ensure that we are no longer dependent on rain-fed agriculture for our food requirements.
In addition, government is introducing Water Resources Bill encompassing the National Water Resources Policy and National Irrigation and Drainage Policy to improve management of water and irrigation development in the country. We are reviving all the twelve River Basin Authorities, namely;
Anambra - Imo
Benin - Owena
Hadejia - Jama'are
Ogun - Osun
Sokoto - Rima
The intention is eventually to fully commercialise them to better support crop production, aqua –culture and accelerated rural development.
29. This Administration is committed to the revival of Lake Chad and improvement of the hydrology and ecology of the basin. This will tune in with efforts to rehabilitate the thirty million people affected by the Boko Haram insurgency in the Lake Chad basin countries.
The second plank in our economic revival strategy is centred on the Ministry of Power, Works and Housing. The Ministry will lead and oversee the provision of critical infrastructure of power, road transport network and housing development.
Power generation has steadily risen since our Administration came on board from three thousand three hundred and twenty four megawatts in June 2015, rising to a peak of five thousand and seventy four megawatts in February 2016.
For the first time in our history the country was producing five thousand megawatts. However, renewed militancy and destruction of gas pipelines caused acute shortage of gas and constant drop in electricity output available on the grid.
There has been during the period June 2015 to September 2016 big improvement in transmission capacity from five thousand five hundred megawatts to the present seven thousand three hundred megawatts.
There were only two system collapses between June and December 2015, but due to vandalism by Niger Delta militants the over-all system suffered 16 system collapses between March and July 2016 alone. As I have said earlier, we are engaging with responsible leadership in the region to find lasting solutions to genuine grievances of the area but we will not allow a tiny minority of thugs to cripple the country's economy.
In the meantime, government is going ahead with projects utilizing alternate technologies such as hydro, wind, and solar to contribute to our energy mix. In this respect, the Mambilla Hydro project, after many years of delay is taking off this year. Contract negotiations are nearing completion with Chinese firms for technical and financial commitments.
The project is to be jointly financed by Nigeria and the Chinese-Export-Import Bank. In addition, fourteen Solar Power Projects have had their power purchase agreements concluded. Hence the plan to produce one thousand two hundred megawatts of solar electricity for the country would be realized on schedule.
And in line with the objective of government to complete all abandoned projects across the country, the Rural Electrification Agency's projects needing completion are provided for in the 2016 Budget. Bringing electricity to rural areas will help farmers, small scale and cottage industries to integrate with the national economy.
Roads Construction and Rehabilitation has taken off. The sum of twelve billion naira was allocated to this sector in the 2015 Budget, not enough even to pay interest on outstanding unpaid claims.
39. Notwithstanding the budgetary constraints, the current budget allocated two hundred and forty billion naira for highway projects against twelve billion naira in 2015. Many contractors who have not been paid for three years have now remobilized to sites. Seven hundred and twenty point five billion naira has so far been released this budget year to capital projects.
The Ministry of Power, Works and Housing has received one hundred and ninety seven point five billion naira. Work on the following highways has now resumed.
Dualization of Calabar – Itu Road in Cross River/Akwa Ibom States.
Dualization of Lokoja – Benin Road, Ehor - Benin city, Edo State.
Re-construction of outstanding sections of Benin – Shagamu Express way, Edo/Ogun States.
Expansion works on Lagos – Ibadan Dual carriageway, Ogun/Oyo States
Rehabilitation of Onitsha – Enugu Expressway, Anambra/Enugu States.
Rehabilitation and Reconstruction of Enugu – Port Harcourt Dual carriageway, Abia/Rivers States.
Rehabilitation of Hadejia – Nguru Road, Jigawa State.
Dualization of Kano – Katsina Road, Kano State.
Dualization of Kano – Maiduguri Road, Borno State.
Dualization of Azare – Potiskum Road, Azare – Sharuri Road, Bauchi State.
Rehabilitation of Ilorin – Jebba – Mokwa – Birnin Gwari Road, Kwara State.
Construction of Oju/Lokoja – Oweto Bridge over River Benue, Benue State.
Other major highways are in the queue for rehabilitation or new construction.
Already contractors have recalled about nine thousand workers laid off and Government expects that several hundreds of thousands of workers will be reengaged in the next few months as our public works programme gains momentum.
On railways, we have provided our counterpart funding to China for the building of our standard gauge Lagos -Kano railway. Meanwhile, General Electric is investing two point two billion USD in a concession to revamp, provide rolling stock, and manage the existing lines, including the Port Harcourt-Maiduguri Line. The Lagos-Calabar railway will also be on stream soon.
We have initiated the National Housing Programme. In 2014 four hundred million naira was voted for Housing. In 2015 nothing. Our first budget this year is devoting thirty five point six billion naira. Much of the house building will be private – sector led but Government is initiating a pilot housing scheme of two thousand eight hundred and thirty eight units uniformly spread across the 36 states and FCT.
We expect these units to be completed within 4 – 6 months. These experimental Nigeria House model Units will be constructed using only made in Nigeria building materials and components. This initiative is expected to reactivate the building materials manufacturing sector, generate massive employment opportunities and develop sector capacity and expertise.
The programmes I have outlined will revive the economy, restore the value of the naira and drive hunger from our land.
Abroad, Nigeria’s standing has changed beyond belief in the last 18 months. We are no longer a pariah state. Wherever I go, I have been received with un-accustomed hospitality. Investors from all over the world are falling over themselves to come and do business in Nigeria. This government intends to make business environment more friendly because we can not develop ourselves alone.
All countries, no matter how advanced, welcome foreign investments to their economy. This is the essence of globalization and no country in the 21st century can be an island. Our reforms are therefore designed to prepare Nigeria for the 21st century."