Revealed: Why Nigeria is suffering from Economic Ebola, and the way out

– President Muhammadu Buhari is being pummeled with series of criticisms by both economic analysts and others alike

– The inflation rate recorded in February, 2016 hits a-three year high at 11.4%

– The National Economic Summit held on Monday, March 21 in Abuja may do a little in moving the nation’s economy from the brink of a possible recession as danger looms ahead for the economy

– The Economic Management Team has not come out to inform Nigerians on why the country is battling with Economic Ebola.

Economic Ebola is a term used by some financial analysts, when a country is facing a series of challenges like: decaying infrastructure, lack of acumen to give life to a dying economy, high inflation rate, mass unemployment, etc.

Role of private sector in moving the economy forward

On Monday, March 21, Monetary Policy Committee (MPC), convened to review developments in the domestic and global fronts, as well as to take key policy decisions. The meeting was the second one the MPC will be holding.

READ ALSO: Danger looms ahead for Nigeria’s Economy

According to the president and chief executive officer (CEO) of Time Economic Limited, Dr Ogho Okiti, he said: “The MPC has limited tools to spur growth and enhance economic activities. Having also achieved its target in the last three years, the committee, will be careful, to ensure that Nigeria do not return to an era of consistent double digit inflation and macroeconomic instability it entails.”

It was during last year presidential campaign, that the nation’s president promised unemployed youths a monthly N5,000 allowance. However, the president has changed his tone, based on economic realities, his administration is facing currently.

National Economic Summit, a good step in the right direction

The idea to convene a two-day National Economic Council (NEC) retreat in Abuja on Monday, March 21, with the state governors is a laudable one. The retreat should not be another shop-talk. All what what was deliberated and discussed there, should be utilised to move the economy forward.

One of the major reasons why Nigeria’s economy suffers setbacks often, is because the managers of the economy are frequently square pegs in round holes. The composition of President Buhari’s economic team is still subjective, as it is believed some people in the team, have no business being there. However, Buhari gave an inspiring speech at the NEC retreat. Time will tell if the people in Buhari’s team will be any different from what Nigeria has had in the past, or will bring the needed changes, that will put smiles on the faces of the suffering masses.

READ ALSO: Buhari’s government is weak – Ango Abdullahi

Parts of the president’s speech at the retreat reads: “In our successful campaign to win the general elections last year, our party, the APC, promised to build a million housing units a year. This will turn out to be a very tall order, unless the federal government builds 250,000 units and the 22 APC states together, manage another 250,000. We invite foreign investors together, with local domiciled big construction companies, to enter into commercial housing building, to pick up the rest.

“First, we need to carry the public along with us for new initiatives. Accordingly, the federal ministry of Agriculture in collaboration with the states, should convene early meetings with stakeholders and identify issues, with a view to addressing them.”

The president also assured Nigerians of an additional 2,000MW of electricity before the end of the year, while he promised that the output will become 10,000MW by the end of his tenure. It was after the summit that the federal government released N350billion, which was injected into the economy as a sort of economic booster.

Feasibility/practicability of proferred solutions to economic challenges

A good number of Nigerians, who have one or more knowledge about the economy, have been offering the government what it could do to salvage the economy. What is worrisome about Nigeria’s economic issues, is that a good number of economic experts in the past, have given various panacea, which did not yield fruit. Some of them were even employed to manage the economy, after knowing about their vast economic knowledge. However, the tune of the music changes, when they are made finance ministers or economic advisers or Central Bank of Nigeria (CBN) governors. What’s really wrong with the economy? Is it the policy makers or stakeholders or even the policy itself?

Of recent, some of the steps taken to save the economy are much. These include: The NEC retreat in Abuja; National Assembly Business Environment Round-table (NASSBER) on Monday, March 21; MPC; Guild of Editors’ meeting on the need for Public-Private Partnership, among others.

Currently, Nigeria is Africa’s largest economy, and the 26th in the world. The country is vigorously pursuing how it will be among the top 20 economies of the world by year 2020. The plausible question to ask here is, what benefit has the position of Nigeria, being number one in Africa, brought to the citizens?

In Adaighofua Ojomaikre’s article in The Guardian of Monday, March 21, titled, FGN internally generated forex revenue, he said: “Nigeria’s economic bane is unending excessive fiscal deficits. By 1978, the world’s leading economies had settled for the managed float system. However, the Nigerian political leadership has remained wedded to a procedure, that corners federation account (FA) forex receipts and facilitates the corrupt enrichment of the political elite to the detriment of the economy.

“It is therefore a blessing in disguise, that the collapse of crude oil prices, has exposed the severe adverse effects of the excessive fiscal deficits, which had hitherto been covered up with false claims, that the economy was making progress.”

The term fiscal deficit simply means, the difference between the government’s expenditures and its revenues (excluding the money that is borrowed). A country’s fiscal deficit is usually calculated as a percentage of its gross domestic product (GDP). Deficit differs from debt. Debt is an accumulation of yearly deficits.

Short term, mid-term and long term solutions

It is conspicuous that the balance of trade of Nigeria is not favourable. This will continue to be so because the country heavily depends on importation of almost all consumable and non-consumable goods. President Buhari has been receiving knocks for his foggy economic policies. The body language of the president on revitalisation of the economy seems to be so much different to that in which he shows in his war against corruption and corrupt practices.

In simple economics, there are economic indices and parameters used to drive the economy. These include: scale of preference, scarcity/insatiability of human wants, opportunity cost and real cost. The success or failure of any nation’s economy is predicated on how these four factors are managed.

Adekoya Boladale in his article, Nigeria’s economy: Awakening the snoring giant, in The Guardian of Wednesday, March 23, Boladale bared his mind on the present economic crunch, and also gave precise and simple ways, in which the battered economy could be given a new facelift. He stated: “Nigeria is dying and it is only a matter of months, before our economy collapses. Saying, we are in austere times, is merely playing it mildly, when a country of over 160million people produce nothing but depends on the production of other countries to meet daily needs, it does not only portray such country as unserious and lazy, but also as incapable of self-sufficiency and independence.

“It is high time government at all levels declared a state of emergency on importation. Nigerians should not be persuaded to buy made in Nigeria products, Nigerians should be forced to buy made in Nigeria products. We are way passed seeking for patriotism, what we should be seeking now is survival. There is no other way out of this. It is either we patronise local products or Nigeria dies. It is time for a Nigeria identity, brands forged in the fires of Ladipo, Aba, Nnewi, Owode-Onirin, Agbara, Ota and Oba Akran. We need brands that will compete side by side, with Louis Viutton, Adidas, Nike and others. ”

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