Exit from Recession: What are the Lessons Learnt?

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Saturday POLSCOPE  

with Eddy Odivwri; eddy.odivwri@thisdaylive.com   08053069356

It sounds good and cheering hearing that after nearly two years of gnashing of teeth, Nigeria has finally exited recession. But it sure will feel better if Nigerians know this exit for a truth, as it relates to the rhythm of lifestyle that comes their way hereafter.

Political patrons, especially from the ruling party, the All Progressives Congress (APC) are already beating their chests in celebratory mood, as if the fragile margin of GDP growth (0.55%) automatically translates to better life for Nigerians. No, it does not!

It is not yet Uhuru. We may be out of recession, but we are certainly not out of the woods.

Since Tuesday that the news broke, Nigerians have been suffused with loads of statistics from the  Statistician General, Dr Yemi Kale, to prove that we have exited recession, albeit in cautious strides. Dry statistics, are what they are: abstract, and mean very little to the ordinary man on the street.

Perhaps what sounded rather comical and undue propaganda was the statement of the All Progressives Congress (APC) claiming that the exit from recession was a manifestation of a promise fulfilled by the President Mohammadu Buhari-led government.

Haba! Was the exit from recession one of the campaign promises? Indeed was there recession before Buhari mounted the saddle? Was it not Buhari’s Finance minister, Mrs Kemi Adeosun who in July 2016, (more than one year after Buhari became president) declared that “technically we are in recession?” So how can waddling out of recession therefore become a matter of a campaign promise kept?

What is more germane is being mindful of the actions and inactions that landed us in recession. It is the consciousness of this that will stay us out of economic harm’s way hereafter.

Yes, I agree that the previous government under former President Goodluck Jonathan grossly mismanaged the economy, what with the mega looting that took place under his administration, yet the present government was not proactive enough in arresting the economic misery it inherited.  Hardly will any government survive the degree of economic malfeasance that took place under the previous administration. However, the Buhari forex policy at the beginning only helped to worsen a bad case. Many investors, uncertain of what will become of the economy simply flew their hard currencies back home and the Nigerian economy began to gasp for forex fresh air. That explains the high cost of the US Dollar and other foreign currencies.

By the time Jonathan left office, the economy was already in a comatose state. Loans were being used to pay salaries, just as the mindless stealing of public funds continued unabated. The huge financial war chest required for the 2015 elections did not help matters. The Jonathan administration was desperate and thus became rather reckless in literally burning the content of the treasury so as to win the election. But yet lost.

The same scenario is beckoning. The 2019 elections are peeping from the horizon. The temptation to deploy public funds to win the election at all costs is there. But as they say in Christendom, God forbid that affliction will arise the second time.

It is good that the lesson of economic diversification has been learnt. The feast achieved in the agricultural and manufacturing sectors are credited to have pulled us out of the recession. Indeed, it will be foolhardy to continue to put our faith and trust on crude oil export. The global collapse of the price of crude in the international market has proven that crude oil is like an ogbanje product: not reliable. Depending wholly on it is like putting all one’s eggs in one basket: an uninsurable risk.

Those versed in economic matters have described our economy as being in a state of stiflation. The threesome components of which are unemployment,  inflation and declining GDP.

Nigeria is yet suffering from the first two. We have only managed to crawl out of the third component.

The high unemployment level is quite worrisome, especially among the youth. As at June this year, the youth unemployment level had risen to 47 per cent. This is as worrisome as it is dangerous to socio-economic order.  This directly means that national productivity will be low, with as many such people in the labour market. It is even worse when we realise the steady population growth in the country which is not proportionate with the economic growth.

Related to the above is the malaise of inflation. With the ever-rising cost of goods and services, especially foodstuff, and low purchasing power of the people, life is bound to be like what Thomas Hobbes describes in his book, Leviathan as, “Solitary, poor, nasty, brutish, and short”.

And that should explain the rising cases of suicide in our society. Many Nigerians are yet living below a dollar per day.

It is bad enough that millions of people are unemployed and wallowing in frustrating economic conditions. Yet it is worse that even those in employment are owed many months of unpaid salaries by their employers, many of whom are also gasping to coping with the ill winds of austere economy. All these have combined to crash the spending power of the people, thus causing trading margins to shrink. The economy must be related so the spending power of Nigerians will grow. The more people can spend, the more money will circulate and end the misery of poverty.

What is the use of a government policy that impoverishes the people and makes life and living hard?

The lesson to learn therefrom is that every government must learn to save for a rainy day. The era of wild expenditure by governments at all levels must be forever gone. Those lengthy convoys of governors, heralded by BMW motorbike outriders must ever remain as our ugly history. We can no longer afford to live large like Arabic princes whereas we are economically flighty and decrepit. We must learn “to cut our coats according to our cloth”.

Federal and state governments must make conscious efforts to support and grow the informal economy by encouraging SMEs to be productive, because in so doing, they (SMEs) suck off lots of idle hands from the job market.

Relatedly, the FDIs (Foreign Direct Investments) must be encouraged deliberately to grow. Foreign investors must be wooed and provided enabling environment to operate.

The manufacturing sector must be assisted to regain its breath. The textile industry, for instance, has all the potential to grow the Nigerian economy, what with the huge population of over 180 million people.

That is why also, the monetary policies of the government must consciously bring down the interest rates charged by banks. It is no use allowing banks to declare humongous profits at the end of every financial year, while the real sector is gasping and shrinking.

In all, it is gratifying to note that despite the rising ululation of exiting recession, President Mohammadu Buhari has expressed cautious optimism by demanding that until the ordinary Nigerian begins to experience the trickle-down effect of getting out of recession, it is yet an unfinished task.

More than politics and religion, the economy is one social variable that binds everybody together. Everybody buys from the same market, the only difference being the varying purchasing power of the people.

Pix— Kemi Adeosun

 

 

Canticles…

 

Yes, Our Unity is Not Negotiable, But…

 

 

Is it true that our unity has long been settled and no longer an issue for a fresh negotiation?

 

Of course yes! But why are you asking?

 

Is it not worth asking seeing how skewed the country is configured?

 

Who configured it?

Don’t ask me. Go and ask Lord Lugard.

 

My brother, we have waxed together as one disparate entity. We have been cobbled and ever so shall we remain, like the snail and its shell.

 

Hmmm, but that must require that every part of the country must be treated with equal respect and regard. It will be vexatious to treat some people as first-class citizens and others as third-class citizens or adjunct folks.

 

Yes, that is an abiding national ethos. Didn’t our old national anthem capture it when it said “though tribe and tongue may differ, in brotherhood we stand”?

 

I am not talking about things written on paper. I am talking of real life and practical situations where this so-called brotherhood is demonstrated

Wait, wait, wait, don’t tell me you are a member of IPOB, where that fellow, em… em… thingamabob has brainwashed some hot bloods to think Biafra is the shortest route to a better life. You look and sound like a suspect. Be careful, the army is already monitoring the kind of conversations going on in the public space. But if I may ask, have you noticed a deficiency in this demonstration of brotherhood?

 

Need you ask? Is it not self-evident everywhere you turn in this country? The indices of this inequality are just everywhere. Even the one-eyed man knows and sees it.

 

I don’t know what you are talking about. Is there any month that federal allocation was denied any state or section of the country? Ehn? Tell me!

Okay, let me give you just one recent example. About ten days ago, President Buhari announced a major shake-up in the organogram of the Nigerian National Petroleum Corporation (NNPC). Fifteen top positions were affected. Out of the 15 positions, ten, yes ten, were given to northerners, three to South West, and two to South South. Not a single slot went to the South East or Middle Belt. Is this the best way of demonstrating the brotherhood you talked about with glee? What is worse, the section that got the lion share of the positions does not have a single drop of the crude oil. The section of the country that produces all the oil was given a measly slot of two positions. What is the rationale?

And if I may ask, what did the people of the Middle Belt or South East do to have been denied even a single slot each?

Hmmmmm, don’t forget the president is also the substantive Minister of Petroleum Resources. And so…

 

(cuts in) And so what? Is it in doubt that he is the Minister of Petroleum Resources and that that chap called Emmanuel Ibe Kachikwu is just a figure head placed there to dilute the sectional concentrate in the corporation? Just answer my question: why was no man or woman appointed from the Middle Belt or from the South east? If the latter is being unduly punished because of Nnamdi Kanu, whose sin are the Middle Belters paying for?

I have warned you before of the new malaise called hate speech. Beware, the soldiers have become like George Orwell’s Big Brother, the silent listener to every conversation. Any day they invite you, I am not part of it-o.

You are dodging the question and choosing to intimidate me. I refuse to be intimidated. I insist that every part of this country is equal. There is no superior section or citizens. What is good for the  goose is good for the gander. A government that promised a change from the old and awkward ways of the past which did not grow us as a people, cannot be seen to be promoting the very same vices it so vigorously campaigned against. If salt loses its taste, then…

 

 

(cuts in) Do not forget that the President is the Commander-in-Chief of the Armed Forces. He can do and undo. He is the al…

(cuts in again) Never! How can an elected president have the power to do and undo? No! I say no! He is guided by the provisions of the constitution. More than that, political expediency will demand that there is evident balancing in his actions in such a way that no section of the country will feel left out or neglected.

 

Well, those issues you are raising are purely political matters. You never can tell the available facts that guided such actions. What is not in doubt is that Mr President means well and is determined to service the bonds of unity binding every section of the country.

 

We are tired of those smooth-flowing grammar. We need action. We need restructuring. That is the clincher to all these imbalances. The lawmakers must wake up and do the needful.

 

May God help Nigeria

Pix—Buhari