allAfrica.com: Nigeria: Inflation Fears As FG, States Share N400bn (Page 1 of 1)

As the Federal Government is set to release about N400 billion of excess crude oil revenue into the economy tomorrow, Minister of State for Finance, Mr. Remi Babalola, has warned that the money, if not properly budgeted for, may crash the momentum the economy has gained over the years.

THISDAY was informed last night that the accounts of the 36 states of the federation would be credited with the excess oil revenue by the Central Bank of Nigeria (CBN) tomorrow.

The "excess" accrued from the difference between the budget benchmark of $40 per barrel and the actual market price of over $90 between January and March this year. The governors had recently petitioned the National Council of State over the money, insisting that it should be released so that the states would be able to tackle the food crisis. Babalola, while giving the warning, said for Nigeria to keep the unstoppable momentum in her economic growth, she needs to control the amount of money pumped into the economy to avoid inflation.

"We don't need IMF [International Monetary Fund] to tell us that we are doing well. The governors are becoming too powerful and if the governors are not prudent in spending, we are going to lose all the substantial gains we have made so far," he warned

Meanwhile, President Umaru Musa Yar'Adua, at the opening of the Inter-Ministerial Retreat on Harmo-nisation of National Economic Empowerment and Development Strategy (NEEDS) 2008-2011 and the Seven-Point Agenda held at the Banquet Hall of the Presidential Villa, has said a double digit GDP growth level is mandatory for attaining our national goal of reducing poverty by 30 per cent and creating 10 million new jobs by 2011.

The double-digit growth rate is also mandatory for Nigeria to achieve her Vision 20-2020, he said. The President, who was represented by Vice-President Goodluck Jonathan, who is also the Chairman of the National Planning Commission, said the implication is that sectoral growth rates particularly the non-oil sectors must be doubled during the plan period.

The President noted that Nigeria's economy in the past four years or more had been remarkable with a stable macro-economic environment and a growth rate averaging 6.3 per cent in the last four years. "However, it is obvious that the associated benefits of growth were yet to trickle down to a large segment of our people. The challenges of poverty [54.3 per cent], growing inequality estimated at 43 per cent, coupled with increasing graduate unemployment remain worrisome. We cannot over-flog the issue of infrastructural deficit that continues to becloud our investment climate. These are issues we must deal with in our development plans. Our goals remain wealth creation, employment generation, sustainable poverty reduction that is production driven. For us to achieve these, the 2008-2011 plans must create ample room for productivity enhancement and value addition that are critical for acceleration of economic growth and development," he said.

In his remarks, the Minister of National Planning and Vice- Chairman of the National Planning Commission, Senator Sanusi Daggash, said the retreat was one of the key activities in the roadmap for harmonising the draft of NEEDS 2 and seven- point agenda towards having a medium term national development plan for year 2008-2011.

He said the need to harmonise the draft of NEEDS 2 with the seven-point agenda was as a result of the desire to ensure that this administration's campaign promises are backed up with specific strategies for its actualisation. The output of the harmonisation process would from the medium term development plan that would guide the development operations of this administration, he said. Also speaking, the Minister of Agriculture and Water Resources, Dr. Sayyadi Abba Ruma, disclosed that agriculture contributes 40 per cent to the Gross Domestic Product (GDP) against 13 per cent for oil; employs about two-thirds of the total labour force of the nation; and provides a livelihood for the bulk of the rural population with about 72 per cent of the poor living in the rural areas.

He hinged the agricultural development challenges to include, inconsistent agricultural policies, dearth of reliable planning statistics, ageing and unorganised farmers, poor uptake of research results, seed stock-poor yield potential, rain-fed production, low irrigated land area, and agriculture land-no collateral value, uncertain soil fertility, fertilizer and agriculture chemicals-supply, poor quality. The Central Bank Governor, Professor Chukwuma Soludo, said Nigeria's financial system was still weak despite reforms "Reforms need to be more holistic, coordinated and reinforcing across the entire financial system. Key sectors need to operate with proper reference to a central objective or global targets. Expert findings and global trends indicate that the Nigerian economy could be one of the 20 largest economies in the world by the year 2025. Our belief is that is it achievable even before 2020.

"Nigeria must be the key driver if Africa is to claim the 21st century. If Nigeria does not make it, Africa cannot make it," he said. Soludo said to achieve the objectives required a unique blend of outlook and a carefully defined implementation framework that embodies the peculiarities of Nigeria. He listed them to include: "A sense of urgency: we are a country in a hurry. We've started late in the race to become a major financial and economic centre globally. "A clear recognition of national potential: we have over the years suffered major economic set back due to our inability to fully leverage the areas of national strength and comparative advantage.

"A clear identification of Financial System Strategy (FSS) and non- Financial System Strategy related factors including politics, infrastructure and fiscal measures: we recognise that these factors, if not identified, highlighted and consciously planned for (despite being outside the ambit of financial services), will prevent the attainment of our financial services vision."

The retreat had in attendance the Secretary to the Government of the Federation, Alhaji Babagana Kingibe, the Head of Federal Civil Service, Mrs. Ebele O. Okeke, ministers, members of the National Assembly, technical teams from the Office of the Vice- President and the National Planning Commission, Perm-anent Secretaries and Directors of Ministries, Departments and Agencies of the Federal Government, among others.

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