Experts Provide Recipe for Nigeria’s Economic Recovery

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From Obinna Chima and Nume Ekeghe in Kaduna

The Chief Consultant Biodun Adedipe Associate Limited, Dr. Biodun Adedipe has advised the federal government to develop policies that would help tackle all forms of unemployment in the country.

Adedipe said this while presenting a paper titled: “The Impact of Economic Recession on the Nigerian Banking System,” at the ongoing workshop for financial journalists organised by the Nigeria Deposit Insurance Corporation (NDIC) in Kaduna State.

The economist stressed that major challenges facing the nation presently are unemployment and underemployment, which in economics is called disguised unemployment.

“Among 24 to 45 youths in the labour force, about 45 per cent of them is unemployed, and that is where the real issue is in dealing with recession. Unemployment has to be tackled to lead the economy out of recession. The challenge is that we have a weak production base in this country and that is also a challenge to this economy.
” In Nigeria, we consume what we don’t produce and produce what we don’t consume.

For instance, most of the agric produce, we generate from the farms and then export without adding any value. The value of the cocoa we sell to the rest of the world is by far so little compared with what we spend on chocolate and other derivatives of cocoa that we import. In this case, we send the raw materials out, but we import finished goods,” he said.

According to Adedipe, if Nigeria is to get out of recession, she must not follow all the World Bank and IMF template, saying you have to sit back and look at what would work for the economy.

“It is not just to take whatever the World Bank and IMF tells us. I warned the government sometime not to listen to World Bank and IMF that says it is only when the growth rate is negative, that is when you fall into recession. What we learnt about business cycle is that it is in four phases.

“You have boom, recession, which means the economy is going down. It doesn’t talk about negative growth, which means we should have been more worried and concerned in dealing with the downslide rather than wait until we enter negative growth. Of course, if you don’t deal with that, you enter a slump. But a recession is not all bleak. If it has a message that eludes most people, it is that after recession, recovery would definitely follow. What matters is what you do, rather than what you are going through in recession,” he added.

Furthermore, the economist expressed optimism that the economy is already on the path of recovery, just as he urged government to show leadership by ensuring that it increases its spending

Adedipe, described the proposed budget for 2017 as “good direction in terms of volume, good direction in terms of structure and of course, good direction in terms of emphasis. So, the important thing is to encourage the government to continue in that direction in terms of sectors to focus on, and then putting emphasis on capital expenditure.”

On his part, the Director of Special Insured Institution Department, NDIC, J.J. Etopidiok, said the regulator has increased strategies to ensure the financial sector’s remains strong.

Noting that the Microfinance/PMB segment holds great potential for economic development, Etopidiok said that NDIC has extended insurance cover for PMBs to N500,000 per depositor from N200,000.

It has also instituted insurance cover for agency banking, online, mobile money to the tune of N500,000, in efforts to deepen payment system and institute confidence in alternative payment channels.