Cabinet Retreat endorses FG’s plan to tackle recession, develop economic emergency recovery bill, bridge funding gap

Participants at the recent Cabinet Retreat on the Budget, have endorsed the Federal Government’s programme of action for dealing with the recession, the effort to develop an economic emergency recovery bill to address the situation and the plan to bridge the existing funding gap.
The retreat, organized by the Ministry of Budget and National Planning (MBNP) on September 15, 2016 at the Banquet Hall, State House Abuja, also agreed on the need to prioritise capital spending in the 2017 budget in the areas of infrastructure development, Agriculture and social intervention.
With the theme, “Building Inter-Ministerial Synergy for Effective Planning and Budgeting in Nigeria,” the participants also agreed on quick win areas to be implemented before the end of 2016 and priority/programme project areas for the 2017 budget.
The opening ceremony of the event was chaired by President Muhammadu Buhari, while Vice President, Prof. Yemi Osinbajo, formally closed the retreat which had in attendance 234 participants consisting of Ministers, Secretary to the Government of the Federation, the Head of Civil Service of the Federation, Permanent Secretaries, Heads of Government Parastatals and other Senior Government Officials.

Below is the full text of the communique:

COMMUNIQUE ISSUED AT THE CABINET RETREAT ON THE BUDGET, HELD AT THE BANQUET HALL STATE HOUSE, ABUJA,
ON THURSDAY, 15TH SEPTEMBER, 2016

A. INTRODUCTION
The Cabinet Retreat on the Budget was organized by the Ministry of Budget and National Planning (MBNP) on September 15, 2016 at the Banquet Hall, State House Abuja.
2. The theme of the Retreat was “Building Inter-Ministerial Synergy for Effective Planning and Budgeting in Nigeria”. The Retreat was structured into two parts, with the first devoted to technical level presentations on the economy by the Hon. Minister of Budget and National Planning and four Economists/Development experts from the private sector. The second part featured syndicate group discussion and presentation of the outcome by Retreat participants. The opening ceremony of the event was chaired by His Excellency, President Muhammadu Buhari, GCFR, ably supported by His Excellency, the Vice President, Prof. Yemi Osinbajo, SAN. The key message from Mr. President’s Address was the need for Cabinet members to think “out of the box” and propose strategies towards moving the country out of recession.
B. ATTENDANCE
3. The meeting was attended by 234 participants consisting of Honourable Ministers, Secretary to the Government of the Federation, the Head of Civil Service of the Federation, Permanent Secretaries, Heads of Government Parastatals and other Senior Government Officials.

C. RETREAT OBJECTIVES
4. The key objective of the Retreat was to discuss the State of the Economy and present the plan the Government has developed for dealing with the economic recession the nation is currently passing through, as well as build consensus on the priorities for the 2017 Budget in the light of the current economic situation. The forum was therefore an opportunity to discuss the framework of the 2017 Budget and key priorities, as well as the deliverables of the Budget.
D. TECHNICAL LEVEL PRESENTATIONS
5. The Hon. Minister of Budget and National Planning, Senator Udoma Udo Udoma set the tone for the Retreat with his paper which focused on “Turning a Crisis Into An Opportunity: The Economy And The 2017 Budget”. In particular, he set out the current National Bureau of Statistics data on the performance of the economy characterised by negative GDP growth, rising inflation and unemployment among others. He identified the major factor responsible for the recession as the over dependence of the Nigerian economy on revenues from a single commodity, petroleum. He graphically illustrated that starting from the first quarter of 2014, as crude oil prices started to fall so did the performance of the Nigerian economy. He showed that the final fall into recession by the end of the second quarter of 2016 resulted from the steep fall in crude oil revenues and, consequently, foreign currency receipts, resulting from the disruptions of oil and gas production by militant activities in the Niger Delta region, especially the bombing of four strategic oil terminals.
6. The Honourable Minister thereafter outlined Government’s plan for getting the country out of Recession. He indicated that Government was working hard to resolve the militant disruptions in the Niger Delta, and, in addition, a fiscal stimulus strategy was being developed involving, amongst other things, a plan to generate and inject large amount of funds, principally in foreign currency, estimated at $10 – $15 billion into the economy through Asset Sales, Advance Payment for License renewals, infrastructure concessioning, use of recovered funds etc, to bridge the funding gap. He also indicated that Government was also planning to introduce measures for fast-tracking procedures so as to speed up the processes for getting these funds into the economy. Some of these will be achieved by Presidential Orders and Directives. In addition, an Emergency Economic Recovery Bill is also being prepared for submission to the National Assembly to deal with those changes requiring legislation.

Beyond the immediate and urgent response to the recession, the Minister of Budget and National Planning, also indicated some of the measures that had been approved by the Federal Executive Council for ensuring that the economy is totally restructured to put the country on the path of sustainable growth and to ensure that the economy is weaned out of continued dependence on one commodity, crude oil, for its sustenance. The full list of these measures are set out in the Strategic Implementation Plan for the 2016 Budget of Change. This document was circulated to all participants for use during the discussions of the breakout sessions.
7. The presentations by the Economists/Development experts covered the following thematic areas:
(i) Weaning the Nigerian economy out of oil dependence by Dr.
Obadiah Mailafia;
(ii) How to Grow Output and Productivity in the Real Sector by
Mr. Bode Augusto;
(iii) Monetary and Exchange Rate Policy Options to Get the
Economy Out of Recession by Mr. Bismark Rewane; and
(iv) Fiscal and Trade Policy Options to get the Economy out of
Recession by Dr. Ayo Teriba.

COMMENTS/OBSERVATIONS
8. All the four presenters were in agreement with the Government’s strategy for getting the country out of recession by increasing the level of government spending. They also made some specific suggestions. These included:
(i) There was a need for Government to work closely with the private sector operators to bridge the funding gap in the infrastructural development, especially given that government was expected to spend N3-5 trillion annually for infrastructure project;
(ii) Federal Government must engage the world about the future of our economy and open up infrastructure investment opportunities; and
(iii) There was a need to break the Federal Government’s monopoly in all areas of the economy.
(iv) The need to improve the communication of governmental initiatives which would help to give reassurance to the public and would build the confidence required to stimulate private sector investment.

E. KEY RESOLUTIONS
9. The key resolutions reached at the Retreat are:
(i) The programme of action for dealing with the recession and the current effort of government in developing an Economic Emergency Recovery Bill to address the situation as well as the plan to bridge the funding gap was endorsed by participants;
(ii) The need to prioritise capital spending in the 2017 budget in the area of infrastructure development, Agriculture and social intervention;
(iii) The Retreat participants agreed on 2-3 quick-win areas to be implemented before the end of 2016 and 6 priority/programme project areas for the 2017 Budget. These included:

(a) Quick wins:
(i) Immediate implementation of the social intervention
programmes (School Feeding, N-Power; Science, Technology, Engineering and Mathematics (STEM) scheme; Conditional Cash Transfer (CCT), etc);
(ii) Effective communication of government projects,
programmes and policies to the citizens will go a long way in mobilizing support for government to succeed;
(iii) Local debt repayment, including debt owed states and contractors to stimulate spending.

(b) Priority Project/Programme areas:
(i) Infrastructure, including Power, Rail and Public Works
(ii) Agriculture & Agro Processing;
(iii) Mining & Solid Minerals;
(iv) Social Intervention Schemes/ Public works;
(v) Human Capital Development; and
(vi) Population Census to facilitate accurate data for
planning
10. The Ministry of Budget and National Planning is to further review and fine-tune the proposal priority areas for incorporation into the 2017 Budget

F. CONCLUSION
11. The Retreat was formally closed by His Excellency, the Vice President Prof. Yemi Osinbajo, SAN, who thanked the Resource persons and facilitators, as well as, all the participants for their dedication and commitment to lift the nation out of current economic recession with the useful suggestions and recommendations.

Cabinet Retreat Secretariat
Ministry of Budget & National Planning
Abuja

September 2016