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Nigeria Economic Recovery in 2016 and Beyond

Kemi Adeosun, Nigeria's minister of finance

By Prof R. A. Ipinyomi, University of Ilorin, Nigeria

By defination after a typical economic recession the shape of its recovery may be dictated by its causes and its remedies. There are many recovery shapes. We can fortunately have a type of economic recession and recovery that resembles a Vshape in charting. Specifically, a V-shaped recovery represents the shape of the chart of certain economic measures, such as improved employment, GDP and industrial outputs. A V-shaped recovery involves a very sharp decline in these metrics followed by an equally sharp rise back to its previous peak. Closely related to the V shape is the U – shape where the rise is equally Sharpe but the recession lingers a while. There are countless other shapes a recession and recovery chart could take, including L-shaped (fall sharp but never recovers), W-shaped (recovers, falls again but eventually recovers), w-w-w-shaped and J-shaped, etc. Each shape represents the general shape of the chart of economic metrics that gauge the health of the economy. Our readers do not need a great deal of lecture in social economic statistics to follow our thought but they need to believe that Nigeria economy has been in recession even before Buhari and his APC party came on board. Whether President Buhari or his APC party understand the situation they are in is another subject matter.

We observe that Nigerians love football and hence many of us can visualise a ball dropping from the high sky. The dropping represents an economic downturn or recession. The ball may (or may not) bounce back fast and very high again if it falls on a hard ground and the bouncing back immediately represents the V shape or a U shape. The ball may keep rising and falling, if the players are not close by, to represent the multiple small w shapes. In economic climate we want the ball to remain in the sky perpetually where we all follow and invest our interests but not on the ground when we shift focus to other economies around doing well and in the sky.

Since APC came on board (May 29 2015) it appears to us that their focus has been on probing former looters and seeking how to get a small percentage of the lootting back to the economy. For the avoidance of doubt we reinstate our total agreement with them on the issue but not necessarily on the exact approach. Nevertheless our point is that these shouldn’t have been the only major focus or the only attention. You don’t surrender national inheritance to thieves, political bandits, bank manager fraudsters or corrupt policing systems. A novel policy to take the nation out of the woods quickly and efficiently is what will be needed not corruption probing itself scenario Nigeria has found itself. Again, it is true that APC was able to force the main economic bad guys for the last 16 years, the PDP, out of the inner room of Nigeria Economic theatre, but may not have replaced them adequately. We have also emphasised a numberless times that corruption in Nigeria is a culture rather than a regime domain. Corruption is in us as it is in every society. The other societies have been able to secure confiscations for those arrested. Here corruption is fighting corruption, corruption governing in corruption, and one arm of a corrupt government is fighting the other arm. There can be no recovery or change in such economic climate, where there is no focus and no united effort nor unity of purpose.

Perhaps the politicians in Nigeria are believing that they are safe or immune to the violence the society may bring on the entire population if things get out of hand; and as they are already getting out of hand. Let us just cite a few example as the umemployed thousands of university graduates and its consequences, my own constituency. We have trained them based on institutions, parents and guadances, and individual applicants. Our expectations include giving them some enlightenment and fixing them in the national and personal economy. What we have is now joblessness and Economic Recession as if all of us are empty heads. We have a lot to do together as a nation and make enough money from, there are many willing hands to work in the system but it seems there is no connection between politicking and human management. Nigerian politicians believe falsely that they are in office to be living above the society that produce them. Even if we have a jobless economic recovery, following this big recession, where the economy as a whole improves, but the unemployment rate remains high or continues to increase over a prolonged period of time, we will still credit the government. This effect may be a result of cautious businesses that add hours to existing employees in order to increase production capacity rather than hiring new workers. None of these seem to be happening as many states have refused to pay the few still on their payrolls.

Government may also claim a ‘Global Recession’ an extended period of economic decline around the world. But we note that Nigeria is a resource based economy with abounding natural resources like all agricultural produces, minerals, large reservation of human capacity, good climates, etc. What we lack in technology can be made up for by importation and innovation of technical skills. In most world economies more than 70% of their technology is home grown as opposed to the 100% importation of technology to our economy here in Nigeria. We emphasise the needed link between academic research institutions, industries and government. You don’t establish over 100 universities only because of admission but also because of their roles in the economy, military and technology. Nigeria cannot hide under a global economic downturn or low oil prices or climatic changes. Instead we need to look inward and mend our ways.

Our advise for President Buhari are in many folds. First, he may have to agree within himself to be a politician or a military dictator. We were told by rumour that President Shagari had to bribe the people in his national assembly to get his bills passed. Fortunately President Shagari is still alive and member of National Executive Council of Nigeria. He can be reached. If a Buhari cannot do that, and I pray he wouldn’t go that low, then he has to improve on the level of communication and cooperation between the presidency and other arms of government. The next level is his selected ministers, with or without portfolio. They need constant reorientation to be close to the very people they are supposed to represent rather than their sycophants. Work with the masses and ordinary people on our streets and experience their daily plights. There is a need to find the right person sitting in the right table amongst the ministers. The states and local authorities need urgent interventions. You may call it bail out or loans but they need to be helped to depend on themselves. The states are also natural based economic but they have been spoon fed over the years on monthly allocations from Abuja just like the Federal government has been spoiled by monthly sales of oil. The health of the economy of each State should have aggregated to form the national economy. The reverse is now the case where a little disturbance in national income translates into a big noise in each State . We have said that a jobless recovery is preferred to a no recovery but our overall recommendation economic recovery would have been the big V-shaped when our ball bounces back quickly.

Prof. R. A. Ipinyomi

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