We Have Enough External Reserves Against Global Recession, Says Finance Minister
US DOLLAR BUNDLES
• Fuel Subsidy to be removed in April
The Finance Minister, Mrs. Zainab Ahmed has assured that the federal government has enough external reserves to withstand global economic recession.
Ahmed, who spoke during an interview with Arise News Channel at the ongoing World Economic Forum (WEF) in Davos said the country has about $34 billion as foreign reserves.
She said that events in the past years have shown that there will be inflation across the world that have weakened the spending power of people.
She pointed out the COVID-19 pandemic and currently the Russia Ukraine war, but added that Nigeria has plans to cope with all the consequences of the trends.
She said, “We have seen the resurgence of COVID-19 in some developed economies, especially China, but also the effect of the Russia Ukraine war that is having a global impact.
“The quantitative easing that is implemented by central banks across the world also contributes to high cost of interest, resulting in high inflation rate, which means people’s spending power is weakened as a result. So there are all indications that there will be a global recession.
“It is true we had higher reserves during the first global recession. Our reserves are now at $34 billion. So that is still a healthy level. It means we’re able to meet at least six months of imports and other expenses into the country.
“It means we can withstand another global shock if we’re able to carry through a coordinated response between the monetary, fiscal as well as trade authorities. We have learned a lot from the experience that we went through during the COVID. And it showed that when we plan as one, we can actually withstand the shocks.”
She also said that the fuel subsidy will be removed in April this year.
She said, “We also have to exit fuel subsidy, because that is also a very significant contributory factor. You can look at it in two ways – it is revenue that would have come to the government but it doesn’t because it has been spent on fuel subsidy.
“Removal of fuel subsidy at that time would have increased the burden on the citizens, and the President does not want to contemplate a situation where measures are taken that further burdens the citizenry.”
The Finance Minister, Mrs. Zainab Ahmed has assured that the federal government has enough external reserves to withstand global economic recession.
Ahmed, who spoke during an interview with Arise News Channel at the ongoing World Economic Forum (WEF) in Davos said the country has about $34 billion as foreign reserves.
She said that events in the past years have shown that there will be inflation across the world that have weakened the spending power of people.
She pointed out the COVID-19 pandemic and currently the Russia Ukraine war, but added that Nigeria has plans to cope with all the consequences of the trends.
She said, “We have seen the resurgence of COVID-19 in some developed economies, especially China, but also the effect of the Russia Ukraine war that is having a global impact.
“The quantitative easing that is implemented by central banks across the world also contributes to high cost of interest, resulting in high inflation rate, which means people’s spending power is weakened as a result. So there are all indications that there will be a global recession.
“It is true we had higher reserves during the first global recession. Our reserves are now at $34 billion. So that is still a healthy level. It means we’re able to meet at least six months of imports and other expenses into the country.
“It means we can withstand another global shock if we’re able to carry through a coordinated response between the monetary, fiscal as well as trade authorities. We have learned a lot from the experience that we went through during the COVID. And it showed that when we plan as one, we can actually withstand the shocks.”
She also said that the fuel subsidy will be removed in April this year.
She said, “We also have to exit fuel subsidy, because that is also a very significant contributory factor. You can look at it in two ways – it is revenue that would have come to the government but it doesn’t because it has been spent on fuel subsidy.
“Removal of fuel subsidy at that time would have increased the burden on the citizens, and the President does not want to contemplate a situation where measures are taken that further burdens the citizenry.”
FOLLOW US
About Post Author
