UPDATE | National Economic Council okays FG's Measure to Beat Recession

*Governors Commend President's Economic Team, Praise Ministers Udoma, Adeosin
Rising from its monthly meeting today at the Presidential Villa, members of the National Economic Council, NEC, presided over by Vice President, Prof Yemi Osinbajo, SAN, expressed support for the plans and proposals of the Federal Government to steer the country out of recession.

While acknowledging the current economic challenges and difficulties, state governors at the meeting also endorsed the work of the President’s Economic Management Team and specifically commended the Budget & Planning and Finance Ministers.

The Vice President is the Chairman of the Council, which advises the President on economic affairs of the federation and in particular on measures necessary for the coordination of the economic planning in the country. NEC is composed of Governors of all 36 states of the federation, and the Central Bank Governor.

BELOW ARE HIGHLIGHTS OF THE MEETING AS PRESENTED TO THE PRESS BY THE GOVERNORS OF KEBBI, OYO STATES & DEPUTY GOVERNOR OF OGUN STATE AFTER THE COUNCIL MEETING THAT LASTED OVER FOUR HOURS.
A. Presentation on State of the Economy by Honourable Minister of Budget & National Planning.
Highlights of the presentation:

• Economy is currently in recession.
• Dependence on a Single Commodity (Crude Oil) whose price we do not control is a major factor.
• Oil price collapsed to less than $30 per barrel in Q1 2016 and market expectations are that it will stay lower for longer.
• However, this crisis is an opportunity to restructure and reset the economy.

Measures for Economic Revitalisation:

• The President’s Economic Management Team (EMT) working on plan to generate immediate larger injection of fund into the economy through:
• Asset sales
• Advance payment of license renewals
• Infrastructure concessioning
• Use of recovered funds etc to reduce funding gaps
• Implementation of Fiscal Stimulus/Budget Priorities
• Fast-track procedures through legislation and implementation of Strategic Implementation Plan (SIP) of the budget
• Meaningful diversification of the economy and cut down importation

*RESPONSE TO THE PRESENTATION AND GENERAL COMMENTS
Council members in response commended the Economic Management Team and generally welcomed the presentation and expressed support for the plan to steer the nation out of recession
Under AOB, Council members expressed confidence in and unanimously commended the EMT and both the Budget & National Planning and Finance Ministers for the presentations to the Council, praising their efforts, competence and capabilities.

B1. PRESENTATION OF DRAFT REGULATIONS ON LAND USE ACT, 2013 BY THE PRESIDENTIAL TECHNICAL COMMITTEE ON LAND REFORM (PTCLR)

• The PTCLR presented to Council draft regulations on Land Use Act 2013 which seeks to make provisions to Streamline mortgage transactions and clearly delineate the rights, duties and obligations of a mortgage

Other aspects of the draft are:

• Conditions for disposal of proceeds of sale and subsequent mortgages and implied terms of a mortgage
• Rights of redemption and remedies and issues on mortgage by companies
• Power of Assignment by mortgage and right of transfer and application of insurance money by the receiver

B2 PRESENTATION ON PUBLIC PRIVATE PARTNERSHIP (PPP) INITIATIVES ON AFFORDABLE HOUSING BY HONOURABLE MINISTER OF FINANCE
Highlights of presentation among others:

• Target of N1billion fund to operate PPP (N500 billion initial) to create a blended pool of long term funds to intervene in housing development finance and mortgage provision
• Funds aims to deliver family housing priced from as low as N2.5 million up to N18 million delivered in a ready to occupy condition with essential services (water and power connected)
• The delivery target is 400,000 to 500,000 housing units per annum
• The ultimate aim of the programme is to channel funds from savers to borrowers, so that builders have the required capital to construct and prospective buyers can access credit to purchase
• The fund will attract low cost local and international capital, including from domestic pension and insurance funds, FG funding, as well as contributions from State Governments and other agencies.

Roles of the States

• State to designate a liaison with whom Family Homes Fund can interface
• Expedite building plan approval process and security of land title
• Invest in enabling infrastructure e.g. Federal roads

Other benefits among others are:

• Improved urban planning and development
• Employment generation and skills enhancement 
• Expansion of tax base

C1. REPORT ON EXCESS CRUDE PROCEEDS

• Honourable Minister of Finance reported to Council that the balance in Excess Crude Account is USD 2.453 billion as at September 20, 2016.

C2 PRESENTATION ON BEST OPTIONS FOR MANAGING FLOATING FOREX POLICY INTRODUCED BY CBN: A JOINT PRESENTATION BY CBN/HM FINANCE
Highlights:

• CBN introduced cautious Monetary Policy orientation as dictated by consumer price and exchange rate
• Adoption of policy tightening measures for flexible forex rate to address persistent pressures occasioned by scarcity and speculative demands
• Improving market dynamics by CBN
• Interventions to States in the area of salaries and in commercial agriculture

The presentation also noted the following:

• Controlling inflation is key to stabilising other macroeconomic indices and the current stance of monetary policy is expected to continue to help lock-in inflation expectations

C3 UPDATE ON BUDGET SUPPORT LOAN FACILITY

• Honourable Minister of Finance reported to Council that N50 billion has so far been disbursed to state governments, and the facility is ongoing.