Nigeria’s dependence on oil reduced to 32 per cent, says Finance Minister
Nigeria’s Minister of Finance, Mrs Zainab Ahmed, says the country’s economy is fully diversified with non-oil revenue more than oil to the national budget.
She said before the President Muhammadu Buhari administration, oil revenue was 60 per cent of the national budget, but had been reduced to about 32 or 33 per cent in the 2020 budget.
Ahmed spoke at an interactive session with journalists on the sidelines of the ongoing IMF/World Bank Annual Meetings in Washington DC, United States on Thursday.
“Let us give credit where it is due. Before the presidency of President Muhammadu Buhari, oil revenue was 60 percent of the national budget, now it is down to 32, 33 percent in the 2020 budget.
“That is indicating that none oil revenue is contributing more than the oil revenue. Also, the Gross Domestic Product contribution of oil revenue is now just about eight percent.
“So, our economy is actually diversified,” the minister said.
Ahmed restated the government’s strategic policy to boost the various sectors value chains to increase their contributions to the country’s GDP.
She said:”What we need to do is to enhance the various value chains in different sectors to make sure that their contribution to GDP is enhanced and significant.”
On why she is attending the IMF/World Bank Annual Meetings in Washington DC, Ahmed said the platform was to discuss global issues that affect all nations.
“We have a session called early warning session where threats to the global prices economy are discussed in a manner that is dispassionate and together we try to find solutions.
“Nigeria leads the IMF C group where, we represent the 33 African countries and also other African countries in that meeting.
“And what we try to do is to put those issues of the African continent on the global agenda.
“On the side of the World Bank, there is a development control meeting, where African countries are represented and currently South Africa leads that,” she explained.
On the rising of inflation to 11.2 per cent as a result of border closures in Nigeria, Ahmed said it was not a high inflation rate.
“That is an excellent question. 11.2 percent is not a high inflation rate. Remember that in January 2017, inflation rate was 18 percent.
“And whenever there is any shock within the economy like the border closure, the market reacts and so you have inflation but it will moderate and it will stabilize within a short period of time.”
On the 7.5 percent VAT increase announced by government, the minister said:” We have sent the finance bill to the National Assembly. The bill has several proposals one of them is the increase of the VAT from 5 percent to 7.5 percent.
“We believe that the National Assembly will do justice to this finance bill.
“Our hope is that the finance bill will be passed within the same period that the budget will be passed because it will enhance our capacity to be able to fund the 2020 budget.”