Nigeria can survive global recession with $34bn in foreign reserves – FG

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The minister of finance, budget and national planning, Mrs. Zainab Ahmed, has said that Nigeria has enough money in its foreign reserves to withstand the effects of the envisaged global recession in 2023.

Speaking during an interview with Arise News at the ongoing World Economic Forum (WEF) in Davos, Ahmed said with about $34 billion in the nation’s foreign reserves, the projected recession will not pose much threat to the country.

“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.

“It is quite likely that there will be a global recession. From the reports we’ve seen from the World Bank and the International Monetary Fund (IMF) and other forecasts, there will be a global recession.

“How it will affect the globe, of course will be different from sub-region to sub-region. But clearly there’s going to be a decline in growth on a general basis,” she said.

The minister said the last recession in Nigeria was short-lived because of the coordinated response, which had not just government, but also the private sector contributing to the efforts, including scaling back on some categories of government spending.

On fuel subsidy, the minister said phased removal of subsidy was still on the cards.

However, she stated that the removal would begin gradually from April stressing that it would not be done in one fell swoop thereby worsening the plight of the Nigerian people.

“The president does not want to contemplate situation where measures are taken that are further going to burden the citizens. So, the decision was to extend the period from June 2022 to 18 months, beginning from January 2022.

“So in June 2023, we should be able to exit. The good thing is we hear a consistent message that everybody is saying this thing needs to go. It is not serving the majority of Nigerians.

“What will be safer is for the current administration to maybe at the beginning of the second quarter to start removing the fuel subsidy, because it is more expedient if you remove it gradually, than to wait and move it all in one big swoop.

“So the idea for us in the budget is that the subsidy costs should not exceed that N3.23 trillion. So whether it’s done completely 100 per cent by June or by July, or whatever, it is a process,” she said.

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