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Summary: Nigerians across the country have attributed the ongoing recession to the present administration’s inability to make suitable policies for economic growth. However, from a critical standpoint, policy implementation has little to do with the recession. The country’s practice of mono-product economy, devaluation of naira, misappropriation, and depletion of the foreign reserve are largely the reasons for the economic breakdown. This would be addressed with expert advisories rather than criticisms.
A recession is a significant decline in general economic activities in a certain region after a certain expansion. Some economists however say that a recession has to be a typical economic decline in two consecutive quarters as reflected by GBP figures in conjunction with key indicators like unemployment and inflation.
Many have attributed the current Nigeria’s recession to bad and unpopular policies of the present government. But frankly speaking, this current eeconomic crisis has nothing or little to do with the policies or measures adopted by the current administration but, rather it was the result of cumulative circumstances among which is, the failure of our successive governments to save for the rainy day especially, when we were in Oil boom and also when the price of the product was high.
Failure to save the surplus of funds generated during these periods coupled with the reduction in global oil prices and volume of demands as well as militants’ activities in the Niger Delta where the oil is being produced which reduced the volume of production from 2.5 million barrels per day to 1.5 million barrels; pervasive corruption and looting of government treasury by government officials. These and many factors have contributed immensely in bringing us to this sorry state.
I can’t believe that some developing/oil producing countries are able to save billions of dollars in their foreign reserves but for our narrow-minded thinking, we could not do the same. Algeria with a population of about 40 million has a foreign reserve of $160 billion and Nigeria with population of 175 million people has merely $28 billion as at today. According to the CIA World fact book despite the current crash in oil price, some countries have still managed to save a lot of dollars to cushion their economy. For instance; Saudi Arabia has $554 billion crashing from $750 billion; United Arab Emirates (U.A.E.) has $84,930,000,000 as its foreign reserve; Russia, $366 billion; Angola with estimated population of 25.8 million (July 2016) has $20 billion; Algeria, $160 billion dropped from $200 billion; Libya, $56 billion dropped from the previous $99.8 billion; Iran, $136 billion; Iraq, $44 billion from the previous $58 billion and Kuwait has $35 billion as its reserve.
If not for this mentality, we may not find ourselves to the sorry state we are in. Other factors that aggravated this Recession include mono-culture economy Nigeria is running as 95% of our export product is petroleum and petroleum products; over-reliance on foreign goods as we import most of our essential commodities such as machinery, chemicals, transport equipment, manufactured goods, food and live animals. Shortage of dollar and excessive demand of dollar which is the medium of exchange in buying those essential commodities from abroad have also make the situation worst. The decrease in foreign reserves and increase in FOREX demand due to over reliance on import goods have again caused the devaluation of our local currencies, inflation rate and rising cost of commodities coupled with the massive looting of our treasury by successive governments officials leave Nigeria vulnerable to current economic crisis. These and many other factors have squarely and heavily strike the Nigeria’s economy.
This country and its people have suffered greatly as a result of actions and inaction of its successive governments. It is therefore a high time to change the way of doing things in this country because the measures and system have failed us woefully.
After the Great Depression period of 1930s the then U.S President, Franklin Roosevelt proposed a program named “The New Deal” designed to bring out United states of America out of the Depression they find themselves. At the time, his programs and measures were considered and perceived to be very radical but he once said, “this country demands bold, consistence and persistence experimentation”; “it is a common sense to take the method and try it and if it fails then try another, if it bubbles try something different”. I think it’s better than to stay idle doing nothing to change the way of doing things. At the long run the New Deal succeeded for many years.
Therefore, it’s worth taken for the present government to try something different from the previous governments as we cannot be doing same things for several decades without any meaningful and tangible result, we can’t keep revolving around the same point, we have to move forward. If these attempts succeed then all of us will benefit and if it fails though we are not praying for that, then at least the president will be remembered as someone who worked vigorously to change the wheel and way of doing things for good even though he failed due to some unavoidable and unforeseeable circumstances. But, for sure Nigeria needs a very bold and persistence experimentation no matter the temporary hardship the experiment might have.
People may criticise the measures and policies this government is taking especially, harsh and tough measures like blockage of land borders; but we have to know that there is no cure without medicine; these measures will certainly boom our domestic economy. And apart from such, measures other measure and polices like, the Economic Diversification processes through agriculture, mining and industry, plan to stop leakages and wastage in the system, improving non oil revenues by bringing hundreds of thousands companies into the tax regime, resuscitating the decayed infrastructures, fighting corruption and many fiscal and monetary policies the Government and Central bank are taking are very laudable policies aimed to stabilise and strengthen the already fragile economy. Many people see such policies as nothing but trial and error while some of them bring nothing but hardship to the common man. Yes, I agree to some extent but, we have to keep on trying until we get it right, for there is no quick or direct answer to the current situation. I am certain there will be a light after the tunnel; with consistency on the side of government and patience on the side of the populace these policies will yield a positive result and turn around the situation for good.
Let me barrow some words from a friend of mine (A. Guraguri) in one of his posts, he mentioned that; one of our previous leaders once said, “The easiest way to become people’s enemy in Nigeria is to do the right thing and ask people to do the same, this way you will be hate”. But hatred and criticism should not deter someone from doing what is right. A lot of leaders are afraid of this fact hence, prefer to keep to the wrong path so as to stay temporary safe and impress the confused Nigerians. But that’s not the leadership; leadership is about doing the right thing even if no one agrees with you and avoiding the wrong even if everyone thinks you have offended them. At the long run the truth will surely come out. Good leader stands to do the right policies for the country to prosper not the popular policies that will temporary make people feel comfortable.
In this situation we are, there is no need of criticism as it would not solve our problems but rather, compound them. Instead, let us be patient, prayerful and hopeful that such policies and measures will get us out of the quagmire we found ourselves. We need to back the Government in its efforts to making the country a better place for all. It is okay to provide constructive criticisms for the government to stand up to its tasks but, most of these critics are just criticizing government policies for the sake of being critics. Rather than criticizing every single policy, I think it is high time for these so-called critics, analysts and economists to proffer advises and solutions to the situation for our nation to prosper.
As our President intends to extend his vacation for medical treatment, I wish him a speedy recovery from the ailment he is suffering. May almighty Allah spare his life to return back home and continue the good and laudable projects/policies he started to get us out of the current situation.
God bless Nigeria.
Key Recommendations: Instead of criticizing every government’s effort, critics are encouraged to put forward expert criticism and advisory that would revive the failing economy.
About the Author: Sanusi Moyi is an anti-money laundering expert. He writes from Abuja.
Keywords: Recession, Policies, Economy, Critics, Foreign Reserve