Business
FG To Accelerate Economic Recovery In 2010
Minister of State for Finance, Mr Remi Babalola, last week in Abuja, assured that the Federal government would ensure an accelerated economic recovery for the country in 2010. This is coming just as the government has also called for urgent exit of public funds from the eight financial institutions rescued by the Central Bank of Nigeria.
Babalola, who spoke at the 2009 ministerial press briefing of the ministry, said government has initiated strategic interventions to stimulate and re-energise the economy, including additional withdrawal from excess crude account.
He explained that the interventions were aimed at ameliorating the adverse impact of credit squeeze due to extreme risk aversion in the aftermath of efforts to strengthen the banking sector.
Babalola noted that the outgoing year has been a year of trauma and turbulence but expressed optimism that 2010 is certainly going to be a year of accelerated economic recovery. He pointed out that the huge withdrawals from excess crude account became inevitable in order to stimulate the economy.
According to him, government has projected a Gross Domestic Product (GDP) growth of $900 billion from the current level of over $200 billion, as part of measures to realise the National Vision 2020 target for Nigeria. He disclosed that the Ministry of Finance is in strong collaboration with the Central Bank of Nigeria (CBN), to fast-track the establishment of an Asset Management Company (AMC).
Babalola stated that the AMC has been conceptualized to assist banks to improve their capital and liquidity positions by taking over toxic assets (qualifying loans) from the banks. He assured that the establishment of AMC will help restructure and further improve the balance sheets of banks as well as enhance the flow of credit to the real sector.
He assured that fiscal authorities, particularly the ministry, were working with the monetary authorities to ensure-long-run soundness and stability of the financial system. The minister called for an urgent exit from financial institutions rescued by the CBN with public funds, while protecting investment value during the intervention.
The minister added that in order to engender confidence, trust and rebuilding financial architecture, the government investments must be based on a tripod of strong governance, superior leadership and enhanced transparency.
He confirmed that there have been improved efficiency and effectiveness of market regulation, enhanced oversight and greater supervision of the capital market by the Securities and Exchange Commission (SEC) in the last seven months.
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