Speaking yesterday at the Presidential dialogue session organized by the Lagos Chamber of Commerce, vice President Yemi Osinbajo outlined some of the challenges that they were confronted with when they came into office.
1.The immediate problem was the sharp decline in oil prices and production, and the lack of savings to cushion the impact. The crisis affected nearly all the sectors of the economy, as reflected in:
a. Declining external reserves;
b.Scarcity of foreign exchange
c.Fuel supply shortages;
d. Derelict infrastructure, especially crippling power outages;
e. Mounting salary arrears at both State and Local Government levels;
f. Increasing unemployment and poverty levels;
g. Failing business confidence; and A vicious cycle of corruption, evidenced by huge leakages, fiscal misdemeanours and indiscipline.
h. GDP declined from 6.3% in 2014 to 2.15% in 2015 and -0.36% in Q1 2016;
i. Insecurity, especially in the North East, elongated by the corruption in Defence procurement;
j. FDI, which stood at about USD395 million in Q1 2015 declined by 56% to USD175million by Q1 of 2016. FPI, which averaged USD621 million in Q1 of 2015, had declined to USD90.3 million by Q1 2016.
k. With the decline in the value of Naira, value of equities have been eroded by over 43% closing at market capitalisation of USD48billion in May 2016 against USD84 billion in same period 2014.
l. Inflation is at 16.5%. Depreciation of the Naira, increase in importation costs due to scarcity of FX,
m. Declining earnings from oil in the past eight months due to vandalization of pipelines and export assets in the Delta.
n. Power output fell from a historic high of 5000MW in February to about 2500 in recent times on account of over 60% loss in gas production due to vandalization of pipelines.
And in order to tackle these problems, the VP said that they undertook some specific interventions, which were prioritized and reflected in various ways in the 2016 Budget and its Strategic Implementation Plan.
