[size=14pt]Atiku is only shedding tears - FG ‘External reserves now $33.2bn’[/size]

THE Federal Government has responded to claims by Peoples Democratic Party (PDP) presidential aspirant, Alhaji Atiku Abubakar, in a letter to President Goodluck Jonathan dated January 2, 2011, where the former vice-president accused the present administration of dangerously mismanaging the nation’s economy.

The Minister of Finance, Dr Olusegun Aganga, who briefed State House correspondents in Abuja, on Wednesday, said that Abubakar was “shedding tears” which did not usually “translate into a credible alternative for the future of our economy.”

He also revealed that the nation’s foreign reserves now stood at $33.2 billion and capable of providing eight months of import cover for goods and services compared to the international standards that prescribe three months of import cover.

Aganga stated that the letter by the former vice- president was a “desperate attempt to mislead the electorate and the Nigerian public through the deliberate misrepresentation of the facts and inclusion of inaccuracies with a view to making political gain ahead of the elections.”

He said: “This administration recognises that as a country, we need a continuous policy effort to live within our means; that is why the 2011 budget is focused on fiscal consolidation aimed at reducing the budget deficit.

“At the same time, this budget is also geared towards delivering inclusive economic growth with accelerated employment generation. Unlike previous budgets, the challenges that we face demand that this budget should represent a real break from the past by identifying the real issues and taking direct, credible actions to deal with them,” he said.

The minister denied the statement by Abubakar that international agencies had passed a vote of no confidence in the governance and management of the Nigerian economy, saying “this is a distortion of the facts.”

He added: “The international rating agency that was cited, Fitch Ratings, actually affirmed and maintained Nigeria’s credit rating. The same report by Fitch noted that Nigeria’s unchanged credit rating is backed by a robust non-oil sector growth, low public and external debt ratios, a strong net external creditor position, the recovery in oil production as a result of the Niger Delta amnesty in 2009 and actually commended the acceleration of structural reform momentum under President Goodluck Jonathan.”

Contrary to Abubakar’s claim, Aganga remarked that the ratings outlook was what was revised downwards by Fitch and not the actual ratings and this was primarily because of “what is seen as increased political risk ahead of the upcoming 2011 elections and the impact on economic policy.”

Aganga noted that, “we expect that with the execution of planned reforms and the successful conclusion of the elections, the outlook from Fitch will normalise,” he said.

The minister further observed that “the other major rating agency, Standard & Poor’s, also kept Nigeria’s credit rating unchanged, with a stable outlook, during its recent review.

“Again, the agency cited Nigeria’s strong fiscal debt position, comfortable external liquidity and the expectation of improved budgetary performance as the rationale for this positive outcome,” he stated.

The government then reminded Abubakar that Nigeria was identified as one of the countries with the highest investment potential by some of the most influential figures in emerging finance markets, who spoke at the Reuters Emerging Markets Summit in Sao Paulo, Brazil, in July 2010.

According to him, “many leading global investment banks continue to publish research backing investment in Nigeria; Goldman Sachs, the leading financial institution, says that those who do not invest in Nigeria now will regret that decision. These statements directly contradict the “vote of no confidence” that the author of the letter and his advisers would like Nigerians to believe.

“Regrettably, the writer and his advisers also deliberately quoted a former Minister of Finance and a Managing Director at the World Bank, Ngozi Okonjo-Iweala, out of context.

“I can confirm that the statement attributed to the former Minister of Finance is incorrect and that the World Bank itself, her employer, has been supportive and has always complimented Nigeria for the economic growth and recovery it has made,” the minister added.

On the presidential hopeful’s criticism of the 2011 budget, Aganga noted that the proposal signalled the beginning of fiscal consolidation and stronger discipline in the management of Nigeria’s public finances, following necessary fiscal stimulus of recent years in the wake of global economic crisis.

“We have continually highlighted the need to restructure our spending so that it does not result in the crowding out of the critical capital investments needed to achieve our development goals. The aim of fiscal consolidation and the 2011 Budget Proposal is to cut the deficit and prevent debt accumulation,” he observed.

Arguing that Abubakar’s letter “deliberately manufactures fictitious numbers to score political points,” Aganga pointed out that the total projected fiscal deficit was cut from 6.06 per cent of GDP in 2010 to 3.62 per cent in the 2011 budget proposal,” saying this was the first meaningful attempt to start to bring the deficit within the limits prescribed by Nigeria’s fiscal rules under the Fiscal Responsibility Act.

Giving further positive indices on the economy, he stated: “Despite absorbing the full impact of the salary increase by 53 per cent in July 2010, we have reduced Non-debt Recurrent Expenditure by 7.02 per cent to N2.48 trillion. Non-debt Recurrent Expenditure includes overheads which we have reduced by 29 per cent from N536 billion to N382 billion, with cuts that affect both the Executive and Legislature;

“Aggregate expenditure has been reduced by 18 per cent, from N5.16 trillion in 2010 to N4.2 trillion in the 2011 Budget Proposal;

“Borrowing in 2011 is projected at N865 billion (a reduction of 38 per cent from the N1.3 trillion in 2010) and not N1.4 trillion.
This level of borrowing is 20.4 per cent of the Proposed Budget, and not the 33 per cent that is presented in the letter;
“The level of capital expenditure in the proposed budget is N1 trillion which is a 43 per cent reduction compared to the 2010 appropriation. However this N1 trillion is higher than the highest amount that has ever been implemented in a 12 or 15-month implementation period. The N919.5 billion utilised in the 15 months comprising the 2009 fiscal year represents the largest amount of capital expenditure expended by our MDAs in any fiscal year.”

He said, “when considered in the light of this administration’s new approach to funding infrastructure, we believe that our proposal is practical and realistic.

“As a government, we recognise that reducing Nigeria’s infrastructure deficit requires more capital and greater implementation capacity than we can afford or provide. We have had to think and act creatively.

“Therefore, our policy focus is on creating the enabling environment to encourage private sector investment in the provision of critical infrastructure services. We are taking bold and decisive actions to address and resolve the infrastructure deficit within the next three years,” the minister said.

http://tribune.com.ng/index.php/news/15774-state-of-economy-atiku-is-only-shedding-tears-fg-external-reserves-now-332bn

dappssee:

This is hopeful if it can be implemented. We only tend to implement the recurrent portion of our budgets, its a crime not to implement the capital portion because a budget, once passed, is a law, binding on all

“Again, the agency cited Nigeria’s strong fiscal debt position, comfortable external liquidity and the expectation of improved budgetary performance as the rationale for this positive outcome,” he stated.

The government then reminded Abubakar that Nigeria was identified as one of the countries with the highest investment potential by some of the most influential figures in emerging finance markets, who spoke at the Reuters Emerging Markets Summit in Sao Paulo, Brazil, in July 2010.

skilo:

Well, the key thing is that Atiku erred by attacking a PDP budget as a PDP member wooing PDP delegates.

denko:

atleast for the six month of this administration of Goodluck Jonathan we have enjoy one thing that most of us (nigerian) have not, for the past 25 years of our existence. we should not be judging people with sentiment, if we let our sentiment to control our sense of judgment then all of us i mean all of us will suffer it. if there is fuel scarcity who will suffer most it is you and i. some of us are just posting whatever that comes because we allow religion, region, sentiment to becloud our reasoning. we need to wake up from all these to make nigeria a better place for all of us.

dSolution?:

Jolly good show. The budget is for PDP not for Nigeria. Nigerians Let us kill Goliath.

Hamid O:

I just pray this two fools from PDP continue exposing their foolishness. Ignorant thieves. What do you expect from a party that has been ruling for 11 years with no improvement in the standard of living of an average citizen. Open your eye people, lets kick this desperate people out

skilo:

Well, the key thing is that Atiku erred by attacking a PDP budget as a PDP member wooing PDP delegates. That may be an own goal coupled with all his other statements. Atiku should concentrate on getting enough PDP delegates first and emerging the winner of the PDP Presidential primaries before he comes out to Nigerians with various claims or Programmes. I think his approach is wrong, putting the cart before the horse and currently fouling the polity. He seems too desperate for POWER and i am afraid. After all his spat with his ex boss OBJ, he betrayed his party and went to visit OBJ for may be support and now OBJ dey laff. As an accountant, from the outside perspective, which ever way you look at a budget presented, you wil have cause to find one fault or the other. It is only when you have sufficient knowledge and information about the budget presented before you can reasonably criticise. The rule of the thumb not withstanding. The President should also act with more maturity. Let the BEST RULE! WHETHER FROM NORTH, EAST, SOUTH OR WEST. WE WANT GOOD GOVERNANCE. ABI NO BE TRUE MY BROTHERS AND SISTERS?

amazonia:

Thank you president Jonathan, for opening the stolen oil stored in the northern desert-silo
for general national supply. Now there is no more artificial fuel scarcity. The estimated quantity
of the hounded oil could serve the north for up to 50yrs-60years of energy need in the event of a
demise of the nation. People hiding our oil for their future used, when people couldn't get for
immediate need. Shame on the perpetrators of that scam. Thieves.

dSolution?:

The Nigeria that Aganga is talking about is not the same Nigeria that does not have electricity. It is not the Nigeria where the roads to nearly all the state capitals are broken down and badly in need of repairs. That Nigeria that he is talking about is definitely not the Nigeria where graduates from Nigerian universities are working as taxi drivers, okada riders and waitresses in restaurants.

Let us face the truth. We have taken the wrong road. Yes Nigeria is on the wrong road and a wise sage said "No matter how far you have gone on the wrong road "TURN BACK". Nigeria is on the wrong road.

Ibime:

Nice one Akainzo. You saved me the hassle. Aganga is a crook and a despicable liar.

You can't introduce pork barell spending and tell us it's lamb.