TIME TO DECLARE A STATE OF EMERGENCY ON OUR ECONOMY
I am troubled with the latest economic performance indices being reported for our Country. The price of our major export commodity, crude oil has continued an unmitigated decline since June of last year, and at a time we had thought the fall had buttoned out, the decline intensified with oil prices dipping below Fourty dollars per barrel. For an economy that began to tremble and quake when prices were only at seventy dollars, it is little wonder to receive the report that the economy is gasping for breath.
Last week, the National Bureau for Statistics, announced that our GDP growth for 2nd guarter has taken a precipitous dip to 2.34%. This is the lowest growth in at least ten years. In 2014, the Q2 GDP growth was nearly 6.54% which is to say that our growth has declined by at least 60% by the second quarter of this year when compared to last year. This is a very troubling development but I am more troubled that our response to this bad news has been tepid and muted. Indeed there has been no comment by the government on this depressing development. Could it be that we do not care, or that we do not understand the ramifications of this or that we do not want to admit reality or is it that we are distracted. The National focus seems riveted on the anti corruption issues and the patently lopsided appointments of President Buhari. As important as those issues are, it is beginning to look to me that our eyes are off the economy.
It is not sufficient to make reflexive political remarks on the economy. Every government will always talk of growing or improving the economy, so just making daily remarks about how bad the economy is or how good we wish to make it, will not change anything. Blaming the previous government for everything is escapist. What will change things is implementing a coherent and well thought through bundle of economic policies. Not the fire brigade actions that the Central Bank of Nigeria seems to be taking in a desperate bid to deal with evolving economic realities. I have repeatedly said that the economy does not respond to decrees nor to platitudes, not to talk of wishes. Since May when the new government came to power, all the economic indices have been getting worse. Inflation has increased,almost going back to double digit, the exchange rate has worsened, despite a well advertised promise to vastly improve the rate, and bank interest rates have increased. GDP is on a precipitous slope and what is worse, the non oil GDP which has shown consistent growth in the last five years has begun to decline and in the Q2 report , it declined faster than oil GDP. Industrial production declined by 3.31%, manufacturing declined by 3.38% while mining and quarrying declined by 6.62%.
For sure, this trend can not be entirely blamed on the new government but they have to take the responsibility, just as they are taking the shine on the apparent improvement of electricity in the Country. There are always two sides to every balance sheet, the assets and liabilities. You can not take one and deny the other. What is surprising me to no end, is both the spoken and body language of the government. There is no hurry. There is all the time in the World to fix the Country and the economy! I believe that we owe the government in power, the notice that they do not have that luxury. We can not be watching the economy continue on this ride to recession and hope that the aura of President Buhari will automatically reverse the trend. After all the hype on corruption and the daily announcements of homongous amounts alleged to have been stolen by some past ministers and other members of the last government, we must re-focus on the economy. Because soon, Nigerians are going to get tired of this and will begin to demand results, as unemployment is increasing and poverty is exacerbating .Over a month ago, Governor Adams Oshiomhole who seems to be the purveyor of the secret information of where the stolen funds are located and indeed on who the thieves are, announced that one minister has 6 billion dollars in his account from stolen oil. Nigerians are wondering what we are waiting for to go and bring back the money or arrest the minister since we know in which accounts they are located and who placed them there. If this can not be done immediately, I will advise that people like Oshiomhole should face governance and leave EFCC and Other security agencies to follow up on corrupt officials. If they have information from America or Russia of from anywhere concerning where our looted funds are, they should pass their information to the relevant anti crime agencies. We hurt the image of our Nation terribly when we make unsubstantiated and unsubstantiable claims about mind bugling amounts claimed to have been stolen by Nigerian officials. Every one must remember that they can be at the receiving end someday. Soon we shall all be ex this and ex that and we should imagine the pain of being accused unjustly or without any iota of evidence. That we have access to free media should not make us blab without control .Some level of decorum is expected of those who occupy high political office. When the transparency International rates Nigeria amongst the most corrupt Nations in the World, they rely largely on what we say or write about ourselves. Let us not bite our noses to spite our faces! After all, the political campaigns have long ended!
Now my point is that our economy is in dire straits and how to halt the decline and return it to high growth should be the primary concern of our governments. This can be done while fighting corruption, using the anti corruption agencies. One of the declared cardinal objectives of the new government at the federal level is job creation. What are we doing about this after 100 days in office? Job creation can not happen when the economy is contracting, when manufacturing is declining and when mining and quarrying are on the decline and the growth of agriculture has declined to only 3.49%. If we continue the way we are going and with the speed with which we seem to be addressing economic issues, then the chances of our economy going into a recession may increase. Because the consequences of that will be too disconcerting to contemplate, I suggest that this is the time to declare a state of emergency on our Economy.
The first element in the emergency will be to immediately appoint the Economic Ministers- Finance & the Economy, Manufacturing & Value creation and Trade & Investment. This should be accelerated and must not wait to be made with all the other ministers. Waiting for another day before this is done is dangerous. The second element will be the immediate release of the economic policies of the government. Many investors are waiting on the wings for this. There is so much uncertainty in the Nigerian economy today and investors are wary and hesitant. Let it be known that investments create enterprises and enterprises create jobs. Which means that if we need jobs, we must promote investment and to do so, we must remove uncertainties. There is no short cut. The third measure, will be a quick effort to align the monetary policies with fiscal policies to restore macroeconomic stability. The current volatile macroeconomic stance is very injurious to the Nigerian stock market, the Nigerian businessmen and to the Nigerian consumers. It must be stabilized quickly before more damage is done.
Fifthly, the Agric-promotive policies and programs started by the last regime should be reformatted and re energized. Currently, there is loss of momentum and this can not help job creation. Sixthly, we should proceed with the completion of the Privitisation of the Power sector and other sectors including the railways . Seventhly and very importantly, we must completely deregulate the down stream petroleum sector now. Somebody should let the president understand, that we are dangerously shooting ourselves on the feet and may soon bleed to death if we do not fully deregulate and fully remove the subsidy. So much beneficial developments will be thrown up with this singular action including the establishment of new refineries and the further evolution of the petrochemical industry, all, opportunities for new investments and plenty of new jobs.There are many other elements of an emergency state on the economy, but these seven elements are primary as they will help refocus on the real issues of economic management and wean us from the entertainment of accusations and counter accusations on corruption between Lai Mohammed and Olisah Metuh on one hand, and between Adams Oshiomhole and Godsday Orubebe on the other side. Let's get serious please!
Mazi Sam Ohuabunwa OFR