[size=14pt]FG announces 8.29% economic growth
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From JULIANA TAIWO Abuja

Thursday, February 3, 2011

The Federal Government has announced a national economic growth of 8.29 per cent in the last quarter of 2010, atributing the feat to the improved performance of the non-oil sector, particularly agriculture as well as increased availability of electricity across the country.



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It also disclosed that no fewer than 539 small and medium scale enterprises (SMEs) had benefitted from credit facilities under the manufacturers/SMEs loan restructuring/refinancing scheme fund to the tune of N199.671 billion resulting in the creation of 7,195 jobs within the period.

The Central Bank of Nigeria (CBN) Governor, Lamido Sanusi, disclosed this in his 2010 Fourth Quarter Report which he presented to the Federal Executive Council (FEC) chaired by Vice President Namadi Sambo at the Presidential Villa.

The Minister of Information and Communications, Labaran Maku, told State House Correspondents at the end of the meeting that the growth is an improvement from 7.86 in third quarter of 2010 while the [b]CBN also projected similar growth in the first quarter of 2011 as capacity utilization in industries had grown from 25 per cent to 29.6 per cent. [/b]Maku explained that the continued implementation of the amnesty programme had boosted crude oil exports and electricity supply to economic centres in the country, hence the optimism of government for increased economic growth.

Although foreign exchange rate stabilized at N153 to the dollar, the CBN was striving to keep the figure at N150 to the dollar as a step towards shoring up the naira. According to Maku,“the governor of Central Bank of Nigeria briefed the council on the performance of the economy in the fourth quarter of 2010. The council was informed that there had been steady growth in the GDP which continues to be driven largely by the non-oil sector, particularly agriculture.

“Though there was moderation in inflation, the governor cautioned that inflation remained a major concern in the short to medium term, interbank rates and other money market rates, including lending.

“The foreign exchange market was substantially stable, while the steady recovery in the capital market continued. The growth in monetary and private sector credit aggregates, however, remained sluggish.

“The governor commended the government for the reduction in the proposed level of expenditure still remained high but that the general thrust of the fiscal policy pronouncements was in the desired direction,” he said.

The FEC also accepted in principle the resuscitation of marketing boards for agricultural produce as proposed by the CBN but with a directive that the modalities and policy framework be worked out by the apex bank for possible approval at a later meeting of the council.

Maku said the CBN governor also briefed the council on the Nigeria Incentive-based Risk Sharing for Agricultural lending (NIRSAL). “NIRSAL is a new innovation mechanism developed by the CBN for unlocking access to bank financing and developing risk-sharing approaches that would expand opportunities in agricultural value chains activities. NIRSAL is aimed at reducing the risks of lending by commercial banks for agriculture; build the capacity of banks to better understand agricultural lending; and increase the outreach of the banks to the rural areas by developing efficient financial delivery system. Overall, NIRSAL is designed to ensure an entire change in agricultural lending by motivating banks that are effectively lending to the other sector.”

The minister said the CBN drew experiences from countries like Ghana and Tanzania where marketing boards had boosted the economies by helping farmers with sale of their produce to avoid losses.

Nigeria’s marketing boards, funded by the government, were dissolved in the 1980s under the Structural Adjustment Programme (SAP) but Maku explained that the new ones would be largely private sector driven and partly funded with taxes from imports.