Pulling the Nigerian economy out of recession

Jim O’Neill, the former Chief Economist at Goldman Sachs identified the MINT countries, Mexico, Indonesia, Nigeria and Turkey as the next emerging economic tigers in the world.  He saw great potential that if properly harnessed will lift Nigeria up as one of the top world economies. However, without having strong institutions, developing an economy that will be a tiger among world economies may be a wishful thinking. Consequently, a review of trends in our country today suggests that the Nigeria economy has moved from the sublime to the ridiculous looking like a forlorn hope.

The responsibility of the National Assembly is the enactment and enforcement of laws that will fight the gravitational pool of negativism in our society to say the least. It is disheartening to note that Nigerians have lost hope and confidence in the lawmakers due to the fact that they have not demonstrated enough integrity, candor, intelligence and maturity. Little is heard about ideological contentions for good governance. Rather they preoccupy themselves more with gallivanting, power struggle and tussle for personal aggrandizement, with blissful ignorance. Nigerians expect our law makers to work with the executives with a view to revitalizing and diversifying our ailing economy. They are expected to deliberate and supervise efforts towards making our weak institutions strong because without strong institutions, there can never be meaningful and lasting development.

An emerging economic tiger is currently facing recession mainly due to lack of focused and visionary leadership, economic mismanagement and corruption. A situation where the Central Bank of Nigeria seems to be confused with so much policy somersault using trial and error in managing our economy with the Monetary Policies never aligned with the fiscal policies and nobody has deemed it fit to query our economic managers. For the fact that government is the biggest spender, one can say that the recession that the country is facing today is caused by law makers who deliberately delayed the budget implementation for over eight months after submission. Initially they alleged that the budget was missing and later they said it was padded. For me, padded budget was a storm in a tea cup in the first place, because budget which is simply a plan of funds to be spent within a year is just a guide. In the course of implementing such plan, government is at liberty to step down whatever project that was never considered before submission to the law makers. The delay in government spending due to the padding “wahala” led to the recession that is taking a toll on Nigerians today.

What effort are we making to resolve the infrastructural decay challenging our country today? Expert says the country requires about $300 billion to bridge the country’s infrastructure gap. It has been demonstrated that infrastructure has been the critical lynchpin to economic prosperity.  However, in spite of the change mantra promise, the federal government has not shown feasible commitment towards resolving our infrastructure challenge. The current government has also negated the vision 20-2020 programme. Recall that Vision 20-2020 was set to place Nigeria among the top 20 Economies in the world by 2020 with a minimum GDP of $900 billion and per capital income of no less than $4,000 per annum. Considering the new development, one is tempted to ask whether the vision is still achievable with four more years to go.

In achieving this vision, infrastructural development is critical. Nigerians expect the federal government to present subsequent national budgets that will tilt towards capital expenditure ratio of at least 60% and 40% re-current expenditure. Anything short of this radical commitment will see the vision as another failed project like water for all by the year 2000. It was as if year 2000 will never come. Sixteen years down the line the country is yet to attain the alleged World Bank project of water for all.

The economy has been adversely affected by external shocks caused by sharp fall in the global price of crude oil with all key economic performance indicators looking downwards i.e. Government spending, export, consumption and foreign investment.  in the oil and gas sector, the unrelenting attacks by militants and the consequent closure of terminals for repairs has taken a toll on economic activities  Consequently, production of crude for export has gone down by 70% thereby impacting negatively on the country’s revenue and creating more unemployment.

Government’s effort in addressing the recession in my opinion has not been encouraging. The country must work towards making this economy a productive one by developing an enabling environment for manufacturing sector to do business for local consumption and export while competing with the global market. If you take a trip to our various industrial Estates and the sea Port, you will weep for this country. The manufacturers are battling with Poor road network which makes it impossible for them to bring in their raw materials, coupled with lack of access to cheap power, high cost of borrowing and recently foreign exchange scarcity. This is not good for an emerging economic giant whose vision is to be among the top 20 economies by the year 2020.

 

To be continued

 

DAC CHUKWURAH