The council is well placed to help tackle the country’s economic problems
Last week, President Muhammadu Buhari formally inaugurated the Economic Advisory Council (EAC). At the ceremony, he, as expected, set agenda for the members, all of them accomplished professionals. While there have been a debate concerning the motive of establishing the council, what is not in doubt is that the current parlous state of the economy compels urgent action. Therefore, instead of needless criticisms and cynicism, every critical player in the country’s economic sector should align with this attempt to chart a new path to productivity.
Already, the council has its job cut out for it with the statement last week by the International Monetary Fund (IMF). “Over-optimistic revenue projections have led to higher financing needs than initially envisaged, resulting in over-reliance on the expensive borrowing from the central bank to finance the deficit,” the IMF statement said, adding: “Inflation will likely pick up in 2020 following rising minimum wages and a higher VAT rate, despite a tight monetary policy.” What that means is that an all-inclusive, pragmatic and participatory approach to resolving our predicament is welcome if we must halt the decline. But the challenges are quite enormous.
Shortly before the administration took over in 2015, critical national economic indices had started to slide downwards. And in August 2016, following two consecutive quarters of retrogressive growth, Africa’s largest economy officially went into recession. With a growth rate of 2.3 per cent in October 2016, the economy recorded one of its most underperforming moments in contemporary times. Even when it showed signs of recovery in 2017, Nigeria’s Gross Domestic Product (GDP) numbers have largely remained sluggish. The latest figures from the National Bureau of Statistics (NBS) which indicate 1.94 per cent in the second quarter of 2019 have also been uninspiring.
The implications of these negative reports at both macro and micro levels are dire. In what appears to be good news, the country’s annual inflation rate dropped to 11.02 per cent in August 2019 from 11.08 per cent in the previous month – the lowest figure since January 2016 – despite government pronouncements on critical variables like border closures, placement of ceiling on the importation of some food items and minimum wage. Unfortunately, the weak purchasing power of the populace rubbishes whatever advantages this promising picture might offer.
The growing lack of job opportunities in the country is equally worrying. During the third quarter of 2018, unemployment in the country rose to an all-time high of 23.10 per cent, from 22.70 per cent in the second quarter of 2018. To further worsen this national embarrassment, the perennial problems of decrepit infrastructure and low capacity manufacturing segment of the economy have remained defiant. Efforts at diversification are yet to yield optimum results.
Tangible steps towards actualising government’s plan to create 10 million jobs announced by the president the other day are needed at this point to ignite hope and enthusiasm in the teeming Nigerian youths. Until that happens, the declared goal will continue to be viewed as yet another political gimmick. Also, the Central Bank of Nigeria (CBN) which reportedly promised to facilitate five million jobs in five years should as a matter of priority expedite actions towards achieving that goal.
The vibrancy of national economy and, by extension, the empowerment of citizens can only truly be actualised in an environment where appropriate economic policies are in place and well implemented. They thrive where both public and private sectors collaborate maximally and contribute meaningfully to the overall wellbeing of the various aspects of the economy. It is probably in realisation of these truths that President Buhari appointed technocrats of proven competence and experience into the EAC.
There is no doubt that Doyin Salami, Mohammed Sagagi, Ode Ojowu, Shehu Yahaya, Iyabo Masha, Chukwuma Soludo, Bismark Rewane and Mohammed Salisu are among Nigeria’s brightest economists. Their national and global credentials attest to their capacity to carry out the onerous responsibility of mapping out the way to economic rebirth and prosperity. Even though the council’s assignment is advisory, it is also interventionist. The president should, therefore, accord their propositions and blueprints the serious and prompt considerations they deserve. With sound fiscal and monetary policies and injection of critical ingredients into the various sections of the real economy, the country now has a chance to halt its prolonged stagnation.
The vibrancy of national economy and, by extension, the empowerment of citizens can only truly be actualised in an environment where appropriate economic policies are in place and well implemented