Babatunde Fashola, minister of power, works and housing, says the seeds of Nigeria’s economic recession was planted during the administration of President Goodluck Jonathan.
Jonathan led Nigeria between 2010 and 2015.
The minister attributed the present state of the country to the reckless fiscal policies and poor choices of the past.
Fashola however, stressed Nigeria will bounce back from the current recession and that the President Muhammadu Buhari-led government will improve infrastructure in the country.
While speaking on Saturday at a forum organised by the Nigeria Infrastructure Advisory Facility (NIAF) in London, Fashola said: “Today, we face challenging economic times. The commodities boom is gone. We have suffered consecutive negative growth and are economically experiencing a recession.
“The reason is simple. It is not what the Buhari administration has done, it is a result of the profligate fiscal policy between 2010 and 2015, when we not only under-budgeted (N4 trillion) in the face of deficient infrastructure, we also compounded it by providing 15 per cent for capital expenditure, which was under-funded and 85 per cent for recurrent, which we adequately funded.
“If infrastructure drives growth as we have experienced from the great depression to the Marshall plan, and lately fiscal stimulus in recent years, our current economic recession is the result of yesterday’s policies and choices especially during 2010- 2015.
“Sometime in March 2015, a little over a year ago, before the Buhari government, a snap survey of four construction companies which I constructed revealed that they had laid off 5,150 workers because government was not paying these construction companies for work done.
“Since my assumption of office, in the ministry of power, works and housing, meetings with contractors in power, works and housing reveal that contractors have been owed 2 to 3 years. These are the seeds of recession, planted and nurtured between 2013 and 2014. The Buhari government knows the cause, and has designed the proper solution: fiscal stimulus and capital spending.”
The minister further noted that the contractors have started recalling workers, and are resuming work on construction sites, since the passage of the 2016 budget,” he said.
“The response is that in the last few weeks since budget was passed, construction companies that had demobilised from their sites and laid off workers due to lack of payment since 2014, are re-mobilising to rail, road, power and other construction sites, and re-calling workers.
“These are the first signs of productivity; they signal a clear pathway out of recession, and although results take time to manifest, Nigeria has chosen an appropriate pathway out of economic difficulty.”