Renowned Political Economist and Management expert, Prof Pat Utomi and two former directors of the Central Bank of Nigeria have advised President Muhammadu Buhari’s economic team on the ways out of the current recession the country has found itself.
For the second time in five years, Nigeria has slipped into recession under the administration of President Buhari with the current one recorded as the worst the country has witnessed in 38 years.
The development, which has continued to generate concerns at various levels in the country is predicted to linger till the end of the last quarter of 2021.
Utomi told FIRSTNEWSONLINE.NG that rebuilding the trust of the people in government would go a long way in assisting the country to come out of the current recession early enough.
He said the threat constituted by government to business in Nigeria and other negative factors have led to loss of confidence in the management of the Nigerian economy.
Utomi blamed alleged tyrannical disposition of the government for the current doldrums the country has found itself, warning that such a stance won’t grow Nigeria’s economy.
He noted that the bulk of the responsibilities to take the right steps to pull the country out of the current doldrums is in government’s hand.
Utomi, therefore, warned that government leaders and officials’ attitude towards decision making must change in order to save the country.
He said, “This should not be a surprise. We have been expecting it to come, it’s just that officially and statistically it is now a recession. But I saw newspapers where they were talking about avoiding a depression. And that my concern. Revision is one thing, but depression is a possibility. It is happening for varieties of reasons.
“In the last one year, what I called triple shock happened to the economy. The shock of COVID-19, the shock of fall in oil price, shock of loss of confidence in managing Nigeria economy by the general public. That shock became murdered a year ago. It came before COVID-19. It is in article of Fox by May of last year.
“And the truth is that the nature of political class in Nigeria has been obsessive narcissism, obsessively focused on themselves, rather than building for common goods of the people. Because of this, the biggest threat to business in Nigeria is government. All of these have led to loss of confidence in the management of the Nigerian economy.
“Now, if this is the case, our challenge is to rebuild trust between the government and the people, but I do not see them doing it. All the decision they have taken is driven by treating people like children and the government as a parent. And I want to repeat this that people should fear the government than for the government to want to fear it, that is tyranny. Tyranny will not grow our economy and we are moving towards it already. If we don’t have people trusting the government, whatever policy that is made for transformation that will bring us out of depression, will not work as it should.”
Vice-Chancellor of the University of Uyo and a former Director at the Central Bank of Nigeria, Prof Hogan Ekpo, said the recession Nigeria found itself is not a common one.
He said, “Once we have 2Q negative growth GDP. But before then, Nigeria was underperforming economy-wise. We were in starvation stage after the recession of 2016. Then the Covid-19 pandemic also led to a sharp contraction of GDP of -6.1 of Q2. So, this Q3 was expected.
“This recession is a special type because it will affect both demand and supply type of the economy. Normally, recession used to affect the demand side, and we will say let government pump money into circulation by various methods, but this one affects the supply side because all the supply chains will shut down. The structure of the company is towards consumption than production, it affects both side, and then with economy in a recession.
“So, the typical government spending fiscal policy may not work. What we need is more of investment policy, how government will give private companies to invest, how government can remove bottleneck from the economy. For example, power remains a problem. How do you solve that so that we can have good production for our economy and outside the country?
“We need a structural policy. When we are in this type of recession, monetary policy will not work. Even if you make interest rate zero, it will not work. But luckily, our Central Bank has what we called developmental function, which they can use to put in place strategy and policies that are structured enough and that will attract investors. But there is third order because people will only invest not just where there is high return, but where the economy is stable. Right now we have security challenges which do not attract foreign investors but the government should diversify the economy and should depend less on oil. Oil has been our problem. Oil sector only contributes 8% and non-oil sector contribute 90%. So, we must begin to diversify so that we will be independent of the oil.
“Government should put on its thinking cap. This is not peculiar to the Federal Government alone, State and Local Government should not be left out in providing the solution. They must also contrite their quota.”
In the same vein, a former Director of Budget at the Central Bank of Nigeria, Titus Okorounmu, advised the government to develop its resources if it cares to take the country out of recession soon.
He said, “Nigeria will get out the recession by developing the resources God has given you. When you do this, you will generate employment, you will meet domestic demand and you can export whatever that is left to earn foreign exchange.
“Recession is not God-made. It is made by our own stupidity. We will get out of the recession when the government wakes up. Oil is not the only thing God gave us. Government should shift focus to other resources. Let’s harness the agricultural advantages and lift our economy.”