- The debate on how Nigeria slipped into economic recession is still on
- Nigeria's minister of power, works and housing, Mr Babatunde Fashola has given insights into the issue
- Fashola blamed the past administration for the economic meltdown
Nigeria’s minister of power, works and housing, Mr Babatunde Fashola, on Friday, September 15 gave an insight into how Nigeria slipped into economic recession.
According to Premium Times, Fashola made the comment at the Lafarge Road Construction Summit in Lagos.
The former Lagos state governor said the recession didn’t happen overnight and attributed the development to poor budgetary funding by the administration of former president, Goodluck Jonathan.
His words: “There have been various comments about who and what caused the recession, I think that Nigerians know the answer to that, no matter how vehemently that debate goes on.
“All I need to say at this time is that if the previous managers of the economy were doing well, the Nigerian electorate would not have relieved them of their jobs in the last general election because a recession does not happen overnight.
“There have also been questions about what the exit of the recession means to the ordinary Nigerian and this for me is the important question; because, even when the economy was growing at 5%-7%, the complaint was that it was a non-inclusive growth.
“Growth was largely oil driven, and sectors like industries, mining and construction had been in the negative since 2014.”
Fashola further said that a core reason was the fact that public spending up to 2015 was largely recurrent and minimally capital.
“Government was budgeting about 15% of an annual budget of N4 Trillion for capital, which is only about N600 billion, and was funding barely half of that,” he said.
“If an example is required, it will be found in the 2015 budget, which was the last budget of the previous managers of the economy, where N18 billion was budgeted for all of Nigeria’s roads, N5 billion was budgeted for power and N1.8 billion was budgeted for housing.
“As if these were not bad enough (but) barely half of these budget provisions were funded.
“The result therefore was that massive debts were owed to contractors who started laying off workers and closing down worksites, and not driving demand for labour, aggregates, lubricants, etc.
“The 2016 budget of the Buhari government changed that,” he said.
Nigeria slipped into recession in the early part of 2016, few months after the present administration assumed power.
The Nigerian National Bureau of Statistics recently confirmed that Nigeria is finally out of recession with a positive growth in its Gross Domestic Product (GDP).
The confirmation was made by Dr Yemi Kale, the statistician-general of the federation, in the on Tuesday, September 5.
Watch Nigerians talk about Nigeria's exit from recession: