• Seek prudent use of available resources, looted funds recovery
• Urge greater focus on agriculture, infrastructure
A cross-section of economic experts has called on the Federal Government to take urgent action to re-strategise and re-engineer the economy to primarily respond to challenges, as Nigeria enters into the second round of recession in five years.
Specifically, the Centre for Social Justice (CSJ), a Nigerian Knowledge Institution, the economic and social circumstances that led to the recession were rooted in the disruptions occasioned by the Coronavirus pandemic, while admitting that economic growth before COVID-19 was moderate, it had not accelerated to the progress previously reached before the dawn of 2015.
Specifically, its Lead Director, Eze Onyekpere, relying on the National Bureau of Statistics (NBS) report, which indicated a negative gross domestic product (GDP) growth of 3.62 per cent, noted that economic performance in Q3 2020 reflected residual effects of the restrictions to economic activities, implemented across the country in response to the pandemic.
He said: “As the restrictions were lifted, businesses re-opened and international travel and trading activities resumed, some economic activities have returned to positive growth. A total of 18 economic activities recorded positive growth in Q3 2020, compared to 13 activities in Q2 2020.
“The recession came at a time of increased national indebtedness, reduced revenue inflow, accelerated insecurity and a divided nation as demonstrated in the just ended #EndSARS protests.
“We are living witnesses to aggravated deficit financing and deployment of 85.5 per cent of actual revenue accrued between January and August 2020, to service debt requests in the 2021 federal budget, estimates for borrowing in the sum of N4.2 trillion as well as vast parts of states in the North West and North East geopolitical zones taken over by terrorists.”
Also, he advised the President to make prudent use of the little available resources through blocking leakages in the system and recovering all resources stolen and mismanaged from the treasury, as identified in various federal audit reports.
He maintained that the proper investment in drivers of economic growth, realignment of the nation’s priorities, pruning the inappropriate, unclear, and wasteful expenditure proposals in the 2021 budget estimates, which were in excess of N235 billion, was the path to go in lifting the nation out of recession.
“The most competent Nigerians irrespective of their religious, ethnic or political party affiliations should be brought on board to manage the security agencies fighting terrorism and the insurgency, and there should be formulation and implementation of new economic, legal and policy frameworks that would be responsive to the reality of our times,” Onyekpere added.
Also speaking with The Guardian on the recession, a Development Economist, Odilim Enwegbara, said insecurity, driven by a minority group has further worsened the fragile economy, where herdsmen continue to terrorize farmers and businesses across the country with impunity.
Enwegbara, who is also the Chairman, Pan Africa Development Corporate Company, decried the excessive government borrowing given the high-interest charges.
“These high-interest rates also mean high debt service obligations on the part of the government. Increasingly, the government has spent most of its small revenues on debt service obligations and the remaining on recurrent expenditure to the extent that there is little or nothing left to invest in social and industrial infrastructure,” he said.
He argued that the lack of investment in infrastructure has been driving the cost of doing business in Nigeria, and with the high cost of money majority of local producers are priced out of the markets by imported products.
He further explained, “With real sector economic activities stagnated, everyone seems to look up to the government for their daily survival. In such a case, no one should expect a vibrant growing economy, and it is all these that are the main drivers of recession in the country.”
He continued: “I have been saying since 2016 that in less than five years the country will witness another but longer recession, I have also said if care is not taken the country could during the second recession go into bankruptcy. And given the kind of unproductive economic system, we have been running, unfortunately, the frequency of these recessions will begin to become shorter and shorter over time.”
In his contribution, Prof. Omoogun Ajayi Clemency, of the University of Calabar, Cross River State, described the latest round of recession as unfortunate.
Ajayi, a Professor of Agricultural Economics, said: “Already, our unemployment ratio is very high, the recession will further diminish the purchasing power and plunge more citizens into poverty, as the global demand for fossil fuel continues to fall, ditto for the price; our mono-economy will almost always be in a comatose state.”
Against this backdrop, he argued that only investment in agriculture can rescue the country, saying: “The government should take agriculture seriously, and invest in agro-inputs, guarantee farmers security, in addition, improve energy supply and make our roads user-friendly. These are immediate catalysts that will mitigate this bad weather called recession, as this is another unique opportunity to diversify the economy.”