It has now been officially acknowledged that Nigeria has entered a recession. It is no longer a technical recession as official position designate it a few weeks ago. This is a time for deep introspection, critical thinking and analysis and out of the box innovative problem solving. It can no longer be business as usual but a time that challenges the best of Nigerians to do something with the inherent capacities and resources that God has bestowed on Nigeria.
For the statistics, the National Bureau of Statistics has provided a lot. Nigeria has recorded a second quarter of negative growth; from -0.36 per cent in the first quarter of 2016 to -2.06 per cent in the second quarter. The oil sector declined by 15.59 per cent from the growth recorded in the first quarter whilst the non-oil sector declined by 0.38 per cent. The Consumer Price Index indicates that inflation has spiked to 17.1 per cent, up from 16.5 per cent in the first quarter of 2016. According to the NBS in the 2016 Second Quarter Capital Importation Report, the total value of capital imported into Nigeria in the second quarter of 2016 was estimated to be $647.1 million, which represents a fall of 8.98 per cent relative to the first quarter, and a fall of 75.73 per cent relative to the second quarter of 2015. This provisional figure will be the lowest level of capital imported into the economy on record, and would also represent the largest year on year decrease. Again, according to quarter two Labour Productivity Report, unemployment rate rose by 12.2 per cent over the first quarter; labour productivity increased by 5.3 per cent on a quarterly basis but declined by 12.8 per cent year on year.
These statistics are frightening and almost shrouds Nigeria with gloom. Many posers are on the lips of Nigerians: Is it over for the Nigeria economy or is there something that can be done to get us out of the recession before it becomes a depression? Did our leaders not see this coming? Did it come like a bolt out of the blues? Could it have been averted and what should we have done to avert it? What lessons can we learn from this experience? And how do we get out of this beyond the idle political rhetoric? This discourse will seek answers to these posers.
It is not over for the Nigerian economy as the words “economic depression” did not come into being because of Nigeria. Other countries have experienced it in the past and mercifully, come out of it. So, there are lessons to be drawn from history as it is an economic ailment that has a cure. But the cure requires discipline and the intake of fairly bitter medicine which if taken in the right dosage and with the right frame of mind, can be excitingly bitter. Unfortunately, our leaders saw it coming because it was almost a self-fulfilling prophecy, a war declared very long ago, which in African traditional parlance should not take the life of cripple because he had a very big opportunity to crawl or be moved and leave the likely theatres of war to a safe heaven. It was not a bolt out of the blues. There were several warnings but the right lessons were not learnt.
Several things can be done to get the country out of this recession. First, it requires inter alia the declaration of a state of economic emergency, leadership by example, fiscal and monetary policy reform, alternative funding of public projects and using public procurement to boost the local economy. It also involves a detailed plan for economic diversification starting from low hanging fruits; remodeling the Nigerian federation to become a productive federation; mobilising the people to accept the fact that only Nigerians will be in the forefront of developing Nigeria. Outsiders can only help when they see we are serious. This discourse will now examine these suggestions.
A state of economic emergency does not mean the accumulation of dictatorial and tyrannical powers in the hands of the President or a few ministers. But it is first a mental shift from the laziness of entitlements, overdependence on oil revenue to a new thought process that makes the leader understand he is a servant. And a servant cannot be greater than his master – the people who have given him the power to lead. For so many years, the knowledge institution where I work, the Centre for Social Justice had on a yearly basis identified and published frivolous, inappropriate and wasteful expenditure after estimates have been submitted by the executive to the legislature. We ensured that the publication gets to every National Assembly member. In their arrogant vacuity, the service rendered at great cost was treated with contempt. When the budget padding issue in the National Assembly came up and people were shouting, it was no news to us. We had long documented them, tried to stop their trajectory but it was like attempting to stop a moving train with bare hands.
We even thought we were dealing with men and women of conscience when we further documented the frivolities after the budget had been passed in a bid to name and shame those in the corridors of power but to no avail. When you are dealing with men and women whose conscience is dead and they have a sense of entitlement, you may likely be wasting your time. This accounts for the billions of frivolous expenses in budgets, year after year. Some of us even laugh when the average Nigerian who does not go deep enough thinks that such frivolities are only found in the votes of the National Assembly. No, the entire budget is suffused with very many not well-thought out allocations.
Thus, the first message is for the leadership in the executive and legislature to proceed for mental rehabilitation that guarantees that they think and reason like men and women who sucked deeply from their mothers breasts. There is nothing in our laws and policies which provide that the President, Senate President or Speaker of the House of Representatives or any other elected officer must drive exotic foreign cars to the neglect of the local automobile industry. There is also no law that insists that they must live prodigious lifestyles to the detriment of the people. The executive and the legislature can run with half of their present 2016 allocations and save costs.
Nigeria’s leadership over the years has always claimed to be thinking beyond the oil economy. However, this cannot be sustained by the macroeconomic projections and indicators they rely upon in planning for the future. The oil benchmark price is still ingrained in our Medium Term Expenditure Frameworks. Before even moving away from oil, we have not explored the full frontiers of the oil industry in terms of refining petroleum at home, making full use of our gas resources to power local industries and gaining substantial export proceeds. Beyond the Dangote refinery, is the country thinking of any other refining and petrochemical complex which will be dedicated to export? More investments are required in the sector to meet local export demand at least starting from the African region.
Do we not have enough men and women who are knowledgeable enough to calculate what we have lost over the years by exporting our oil in its crude form instead of exporting it as refined petroleum? We are possibly missing over 50% of the revenue that should have accrued if we refined and exported a good part of our crude oil. This excludes the calculation of the cost of importing refined petroleum to the economy.
To be continued
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