“Things may get even more difficult…But any sustainable economic progress will require a new direction, driven by a cocktail of comprehensive and timely policy actions implemented by a forward-looking and innovative government” – Bismarck Rewane (November, 2017)
When in early November 2015 yours truly raised an alarm over an impending economic recession via an opinion essay, published in some newspapers, it was taken by policy makers with a pinch of salt. In fact, there were denials from government quarters that any form of an economic downturn was in the offing. To those with the philosopher-king mentality, who never make mistakes, one’s position then was but a figment of someone’s weird imagination!
But barely two months later, precisely in January 2016 it became one harsh reality that could not be wished away with a wave of even a magician’s hand. That essay was titled:” Are we prepared for the looming economic recession?” Instructively, one had admonished Mister President to assemble a team of top technocrats, outside government circle as a think-tank on the country’s economy as what earlier reflected in another essay entitled: ‘The Power of Change’. The caveat was that the pilot of the ship of state must be ready and willing to listen to the wise counsel of these men and women of honour, to steer the nation safely out of the stormy economic waters.
One can therefore, only imagine the immense delight felt when on September 16,2019 the federal government made public the names of the members of the new Economic Advisory Council (EAC). Made up of Prof. Doyin Salami as Chairman, Dr. Mohammed Sagagi(Vice-Chairman), Dr. Muhammed Salisus (Secretary) other distinguished members include Prof. Chukwuma Soludo, Mr. Bismark Rewane, Dr. Iyabo Masha, Dr. Shehu Yahaya and Prof. Ode Ojowu. The EAC has come to replace the Economic Management Team(EMT) as once headed by the Vice-President, Prof. Yemi Osinbajo. The new body will be reporting directly to President Muhammadu Buhari.
Essentially, members are to advise him on sundry economic matters traversing policies and their direction, economic growth or otherwise, as well as local and global economic matters and their impact on the quality of life of the hapless citizens of Nigeria. Honestly, this move has become an imperative.
One does not need rocket science to realize that all is not well with our economy. With the economic growth reducing to 1.94% at the end of Q2, 2019 compared to a positive performance report, with the gross domestic product (GDP) growth at about 2.38 percent in the fourth quarter of 2018, according to the Nigerian Bureau of Statistics (NBS) calls for concern. What with the parlous state of infrastructure, characterized by pothole-riddled roads, epileptic electric power supply and increased flooding that has ravaged farmlands across the country?
What more for a pauperized populace that has to pay 7.5%(up from 5%) for Value Added Tax(VAT), multiple taxes after increase in the pump price of petroleum products and gearing up to pay toll-gate fees? Add these to the sudden increase in the cost of bags of rice and poultry products after the closure of borders! That all these economic shenanigans are playing out in the face of rising unemployment, and poverty, humungous, unjustifiable debts that have reached N25.7 trn escalating by N3.3trn in only one year dims
According to the World Bank Group on Nigeria Overview, it would be recalled “that in 2016 during its first recession in 25 years, the economy contracted by 1.6%. Since 2015, economic growth remains muted. Growth averaged 1.9% in 2018 and remained stable at 2% in the first half of 2019”.
Though recent data, in October, 2019 suggests that the economy gathered momentum in Q3, and preliminary OPEC data showed that oil output averaged higher in Q3 than in Q2, the absence of true fiscal federalism cannot grow the economy. Let us glean from the views of two members of the EAC-Rewane and Soludo, going by their public lectures.
According to Rewane, in his thought-provoking lecture delivered during the 8th Convocation of Bells University of Technology, Ota in November, 2016 economic development can be measured by looking at the state of human development, institutional structure/evolution as well as physical development. The Human Development Index (HDI) as the closest measure covers the three related dimensions of knowledge, a long and healthy life and a decent standard of living. Another measure is the state of institutions in a country.
He has admonished that we do away with the mentality of polarized institutions, certain group of individuals and organizations that tend to capture all the wealth, power and opportunities the country has to offer.
He lamented that Nigeria, which recorded one of the fastest growing economies in the world between 2006 and 2016, found itself during the recession in 2016 “in one of her darkest moments.
According to him, the flicker of hope we have is that digital technology that has taken precedence with the growth of startups in areas such as hospitality, tourism, agriculture, education and financial services. The fastest growing segment in the Service Sector is ICT which accounts for 10% of the country’s GDP. Nigeria’s capacity for innovation was ranked 77th amongst 138 countries. Internet penetration has hit 47.44% the second highest in Africa. And four telecoms operators have rolled out 4G services.
On his part, Soludo’s lecture themed: ‘Redesigning the Nigerian Economy with New Ideas’ was held at The Covenant Place, beside the National Theatre, Iganmu on October 1, 2019at the instance of The Platform. In his candid view, for the national economy, it will be difficult to have a competitive and prosperous post-oil economy of the future with the same legal and institutional foundation designed for consumption of oil rent.
Said he: “You can’t build a 100 storey-building upon a foundation of an old bungalow. You can’t clap with one hand. Once the focus is wealth creation rather than sharing and consumption of oil rents, we need a new national business model”.
He has therefore, advocated devolution of powers according to the principle of subsidiarity and variable geometry – away from the current system of unitary-federalism, with its choking concentration of powers and responsibilities at the inefficient centre; thereby giving power back to the people.
In addition, he has suggested the Productive Progressive PP Constitution that would unleash the competitive spirit, hard work, innovation and efficiency which are the hallmarks of prosperous economies of the future. Nigeria urgently needs a new Fiscal Responsibility Act to constrain irresponsible fiscal behaviour and provide incentives to create wealth. It also needs a Legal-Judicial infrastructure for economic transformation.
For me, answers that members of EAC should be fathoming for the president and the country are fuelled by some salient economic questions. For instance, how do we provide the enabling environment (security, stable infrastructure, single-digit interest loans, increase in purchasing power) for manufacturing to thrive? How do we increase, not just food production but the value chain issues of safe, secure, storage facilities, preservation and processing to international standards for both local consumption and export?
Something should be done to resuscitate the long-prostrate Ajaokuta steel company that has the capacity to generate over half a millions jobs if functioning effectively.
The EAC certainly has to find pragmatic solutions and advise the president on the best way out of the economic wood. And the president must have a listening ear, muster the political will to do the needful beyond personal, parochial, political sentiments, all in the national interest. Only that would stand his legacies in good stead.