Mr. President and an economy in recession

7 years ago

Mr. President and an economy in recession

The Nigerian economy is in recession, or “technically in recession”, as the Minister of Finance, Kemi Adeosun, put it last week, and seems to be at the lowest point it can be in recent history. We have rocketing inflation at 16.9 per cent, high unemployment rate, high interest rates exceeding 20 per cent per annum, weak demand for goods and services and not just a stagnant economy, but an economy that is shrinking. The foreign currency reserves over the years fell from over $40bn to just about $26bn whilst international rating agencies had a free reign downgrading Nigeria’s economic rating and that of its associated private sector institutions. All the economic indicators are pointing south and the horizon looks extremely bleak. What do all these figures portend and how can they be reversed? It feels like going down a steep slope without any hope of a wedge to slow down the movement.

It is imperative to recall that sometime in July 2015, the Central Bank of Nigeria through the communique of its Monetary Policy Committee warned about an impending recession if things continued the way it was going. The CBN called for urgent and drastic measures to stem the tide but it is obvious no one seemed to have listened. At that time and even up till now, most economic watchers stay glued to the media to know the outcome of the Monetary Policy Committee meetings. The impression has been created that the fiscal policy component of macroeconomic policy does not matter or is either in abeyance or does not exist.

Where do we begin to stem the tide? The first step is to ask and provide answers to the fundamental posers. What does the political leadership of the country headed by President Muhammadu Buhari think about this situation? Is the President and his team sufficiently worried about this ugly scenario? If the political leadership have thought through the economic challenges, have they communicated to Nigerians? If the answer to the second poser is in the affirmative, what new ideas or old tested ideas are they bringing to the table? The government is elected to govern with the consent of the people and is expected to show leadership and policy direction in matters that impact on the lives, livelihood and properties of citizens. From the present scenario, the leadership seem to be in denial and no one is seriously talking about the challenges in terms of planning an exit strategy.

The starting point will be to devise an agenda for action, an overarching framework for governance, not just in the anti-corruption sector alone, but across all sectors. It is a fundamental aphorism that if you fail to plan, you plan to fail. Nigeria is too big to be run without a coherent policy framework. Running Nigeria as the “spirit leads” the leaders cannot be an option in the 21st century. Investors, rational citizens, the international community, etc, need to see the policy framework which will be the basis of engagement. No reasonable person takes a leap of faith in making investments worth billions of naira.

Just like the anti-corruption agenda has taken the time of the administration, Nigerians need to be alive to continue the struggle. We need to see our President lead discussions, appoint strong committees, and hold expert sessions on different themes of reviving the economy. The President needs a strong team anchoring our economic revival. We need the best hands available in this country irrespective of their political, ethnic, religious or geographic leanings and origins.

In reviving our economy, we need to get our priorities right; declare a state of emergency on the economic sector. The contours of this state of emergency will have nothing to do with accumulation of powers in one person or committee to enable the abuse of human rights and liberties. Rather, it will include leadership by example, reduction of salaries and perks of office of political leaders. It is immoral and I dare say illegal, for elected and appointed political office ho