Roundup: Pipeline attacks to blame for Nigeria's economic hardship

Nigeria started to experience recession due to oil and gas vandals in Niger Delta region, the country's Vice President Yemi Osinbajo said Monday.

Speaking at the Presidential Quarterly Business Forum with the private sector in Abuja, the nation's capital, Osinbajo called for an understanding of the nature of the recession.

Nigeria entered a recession on Aug. 31, when figures released by the National Bureau of Statistics showed the second quarter Gross Domestic Product fell 2.06 percent year on year, after slipping 0.4 percent in the first quarter.

The West African country's present economic situation has already been described, both by the government and financial experts, as "the worst possible time ever," with many predicting that this recession may last for up to three years.

He said the U.S. recession in 1931, which became a depression, happened when the country was over producing in the manufacturing and agricultural sectors with high capacity in railways.

"In our own case, it is completely different. If we did not have the vandalism of pipelines in the Niger Delta, we probably would not have entered into recession by now," he said.

"There is no place anywhere in the world where you can lose 1 million barrels per day in oil production when you are projecting 2.2 million barrels per day and you would not suffer tremendously," he added.

"It becomes so, especially when that same revenue is what drives your non-oil revenues," Osinbajo said.

The VP said the government was engaging with the Niger Delta stakeholders to find a way out of the ugly situation.

Armed youths launched a wave of attacks at the start of the year to demand a greater share of oil revenues for the swampy region, which produces most of Nigeria's crude but whose residents are mired in poverty.

Osinbajo said the youth were being carried along in the recovery program, adding that recently the government organized technology innovation competition involving no fewer than 4,000 youths nationwide.

Meanwhile, Minister of Information and Culture, Lai Mohammed, said Nigeria's over-dependence on oil was responsible for the current economic recession.

The minister told reporters that the prevailing economic situation was not about trading blames, pointing out that this recession was bound to happen in such circumstance.

He said the crash in global price of oil exposed the country's defective economic policy, with oil accounting for over 60 percent of the nation's gross domestic product.

The minister stated that the situation was further compounded by inadequate reserve to cushion the effect of oil misfortunes on the country.

He decried the citizens' preference for imported goods to local products, saying that substantial amount of the country's foreign exchange earnings was spent on importation of goods and services.

Mohammed also blamed past administrations' inability to achieve massive investment on infrastructure to assist manufacturing industries and boost agriculture production.

According to him, such inadequacies are responsible for the socio-economic imbalance being experienced in the country today.

The minister, who acknowledged that there was growth in the nation's economy between 2010 and 2014, however, said the growth was only fueled by consumption.

He said the present administration's efforts to correct past anomalies could not be felt immediately because the rots in the system were too enormous for short term remedies.

Africa's second largest economy has formally entered a recession, and Nigerians are feeling the pain, both from the downturn and soaring inflation. Inflation has reached an 11-year high, and the prices of locally produced goods are up. Endit