The Economy will Start Getting Out of Recession by the Fourth Quarter of 2016 – Godwin Emefiele

CBN Governor, Godwin Emefiele

The governor of the Central bank of Nigeria (CBN), Godwin Emefiele, has said that with the measures put in place by the Federal Government, the economy will start getting out of recession by the end of this year.

He made this known while speaking to media executives on Saturday.

“We are already in the valley, the only direction is to go up the hill and the government is doing everything possible to ensure that we move up the hill. I am optimistic that based on the actions being taken by the monetary and fiscal authorities, the fourth quarter results will show evidence that we have started to move out of the recession.

The worst is over. The Nigerian economy is on the path of recovery and growth. So, please if you are a bystander or sideliner, you are losing; join the train now before it leaves the station,” he said.

Emefiele said that the CBN has decided to establish a bridge fund for the government to utilise to stimulate the economy whenever there is a need for it.

“Both the monetary and fiscal authorities are working together and that is why you can see a situation where today even when we have revenue shortage or deficit, the monetary authority is trying to bridge the gap.

We said to the fiscal authority that we can give you a bridge to go ahead and spend, and when you obtain the foreign loan that you are negotiating, or when your revenue improve, you can repay the bridge that we have created for you in order to stimulate spending. That is a practical case of collaboration between the monetary and fiscal authorities,” Emefiele said.

Emefiele said that since the introduction of the flexible FOREX regime, almost $1bn has come into the country from Foreign Direct Investment (FDI) within the last three months.

The governor said that another way to stimulate the economy is for the country to sell some of its assets in the Oil and Gas sector.

“In April 2015, even before this government came on board, I had opined that there was a need for the government to scale down or sell off some its investments in oil and gas, particularly in the NNPC and the NLNG, at that time when the price of oil was around $50-$55 per barrel. We actually commissioned some consultants that conducted a study and at the end of that study, we were told that if we sell 10 per cent to 15 per cent of our holding in the oil and gas sector that we could realise up to $40bn.

Unfortunately, the markets have become soft. If we choose to do that now, we can still get $10bn to $15bn, or maybe $20bn. If we have that kind of liquidity, it will be easy for us to really stimulate spending and also to turn the economy around. That proposal is still on the table, because I have also heard that some of our colleagues in the Federal Executive Council have talked about it and a lot of people too.

If we take that option, I am optimistic we will be able to stimulate the economy and earn the foreign currency that we can really use to kick-start it,” he said.

Credit: PUNCH