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The Nigerian Economy Is Strong, Vibrant And Stable

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It is my pleasure this afternoon to address you gentlemen of the press on the state of the Nigerian economy especially in view of fears in certain quarters about the discovery of shale oil by the United States Government and its likely effect on our crude oil production.

We wish to assert that the degree of transparency and forthrightness which this administration has displayed in the management of the economy in the last two years as well as the various fiscal policies, reforms and programmes adopted by the Jonathan administration since its inception do not give room for  fears that the economy might in any way be endangered.

 The truth is that contrary to this thinking, Nigeria's total National crude oil production is 2.06 million barrels per day.  Europe has become a major destination for Nigerian crude oil cargoes, with the volume of Nigerian crude oil grades going to Europe increasing from 28% in 2011 to about 38% in 2012. A major factor for the growing demand of Nigerian crudes in Europe has been the Free Trade Agreement between Europe and South Korea. It is more profitable under this Agreement to sell North Sea crude oil grades to Korea. Many companies prefer to trade their cargoes in Korea thus creating shortfall in Europe. In addition, the North Sea as a whole is recording annual natural decline from matured field of about 10%.In the same light, Asia's demand for light sweet grade is raising, stepping up demand for Nigerian grades. India in particular is consistently taking an average of 120,000 barrels per day from Nigeria.

Already, the Federal Government is adopting appropriate strategies to effectively mitigate the impact of decline in the US markets. The number and volume of term contracts with Asian refiners is gradually being increased. Current term volumes to Asian refiners stand at 120,000 barrels per day .In both the short and medium term, a combination of market openings in Europe and Asia will effectively compensate the loss of US market and offer needed support for Nigerian crude oil exports.

Every discerning observer will notice that socio-economic challenges which had existed for several decades and which the current Transformation Agenda is effectively tackling are clearly spelt out in the Mid-term report presented to Nigerians by President Goodluck Jonathan a few weeks ago. These challenges include, among others, dependence on oil exports, high recurrent expenditure, high food importation, poor infrastructure, high inflation, falling reserve and rising domestic debt.

While the Nigerian economy ,like other oil dependent ones globally, often suffer from drop in sales and fluctuation in international pricing ,the Jonathan administration has implemented  key reforms to reduce dependence on oil and these reforms have resulted in the Agricultural sector alone contributing over 40% to the Gross Domestic Product in two years. Oil exports are now 69% of our total exports as against 91% in 2008.

It is also on record that this government is currently implementing measures which have considerably reduced incidence of crude oil theft in the last two years. The Nigerian Navy and Maritime agencies have been provided modern security and patrol boats to effective patrol the water ways leading to the apprehension and prosecution of oil thieves. The President has also solicited the co-operation of the United Kingdom, United States and other countries in tracking and apprehending thieves of Nigerian oil. Efforts are also on to stop foreign refiners from buying stolen crude oil from bunkerers. This is a continuous effort which will surely be sustained until the situation is put under control.

On the issue of high cost of governance, it is noteworthy that under the administration of President Goodluck Jonathan, Nigeria's recurrent expenditure dropped from 74% in 2011 to 68% in 2013 and will further go down in the next fiscal year.

Just three weeks ago, government began the implementation of reforms suggested by the Orosanye committee to further reduce recurrent expenditure by about 1 trillion Naira in the next three years through the rationalization of Agencies and Departments of Government with similar functions.

Domestic Government borrowing declined from 852 billion in 2011 to 588 billion in 2013.Our National debt is 21% of our GDP compared to South Africa (42.7%) Sub Saharan Africa (34.2%) USA (106%) Japan (225%) United Kingdom (90%)

Our foreign reserve has climbed up to almost 50 billion dollars while the exchange rate has been steady.

On infrastructure, major roads like the Kano-Maiduguri, Benin-Ore, Abuja-Lokoja, Owerri-Onitsha, Katsina-Daura, East-West road and many others are being rehabilitated or reconstructed. The second Niger Bridge has been concessioned and work is in steady progress. The Lagos-Ibadan Express was awarded yesterday at a total cost of 160.7 billion Naira. The multi-lane road project which will be handled by Julius Berger Construction Company and the RCC will consist of 3 lanes on either side up to Sagamu junction and 2 lanes up to Ibadan as well as a fly over and inter-change at the Redemption camp to solve the perennial traffic grid lock on that portion of the road.

On the problems of high food import, the Jonathan administration has achieved a reduction on the quantity of  importation of rice, a major staple food and dominant import item which drains enormous foreign exchange, from 5.2 metric tons  to a little over 2 million metric tons in two years with the ultimate goal of attaining 100% sufficiency by 2015. Wheat imports have reduced from 4.1million metric tons to 3.7 million metric tons within the same period. Sugar import is also on the decline. Despite ravaging floods in 2012, Nigeria did not suffer anticipated food shortage as a result of proactive measures to assist farmers with flood resistant seedlings and dry season farming as 8 million metric tons was added to domestic food supply in 2012 which was 70% above target. In total, all the above measures have saved Nigeria 857 billion Naira which would have been spent on food imports.  In recognition of these and other measures, the Food and Agriculture Organisation FAO recently presented an award to Nigeria and other countries for combating hunger and attaining the first goal of the Millennium Development Goals, three years ahead of the 2015 target date.

The inviolable truth is that the Nigerian economy, like the economy of other Nations has its challenges which the Jonathan administration has courageously and innovatively been tackling with measurable, obvious and clearly tangible positive results in the last two years.

With these considerations therefore It is unfair and incorrect for anyone to suggest an impending collapse of the economy on the basis of a drop in crude oil sales which is not within the control of any single Nation, without taking into account current efforts by government to  diversify the economy as well as fiscal measures which have resulted in inflow of over 14 billion dollar new investments in the non-oil sector of the economy as well as other favorable ratings of the Nigerian economy by International rating agencies.

Recently, the United States based Reputation Institute (RI), the world's foremost Organisation that imparts reputation knowledge and monitors reputation of organisations, places and leaders ranked Nigeria, for the first time in its history, among the top 50 reputable countries out of about 195 independent countries in the world. Some of the criteria used include effective governance and advanced, stable economy.

All these global attestations to the effective management of the Nigerian economy clearly puts a lie to the orchestrated and sustained malicious campaign by the opposition and their persistent and illogical refusal to recognize and accept the unprecedented and ground breaking achievements of the Jonathan administration in just two years of its existence.

Thank You
Dr Doyin Okupe
Senior Special Assistant to the President (Public Affairs)