Wednesday, 11 November 2015

#MustRead: As Economic Recession Looms

Recession ahead, tighten your seatbelt
by: Ayo Oyoze Baje

The essence of democracy is for the political office holders and policy makers to muster the capacity to identify and satisfy the needs, yearnings, aspirations, collective dreams and desires of the people. That is, as against satiating the pecuniary and obscene tastes of the political class, at the detriment of the led majority.

But now, our economy is in a tail spin. The ship of state is currently caught in the eye of the storm. The oil-dependent economy which has long been besotted by the wanton waves of waste, profligacy and the hydra-headed monster of greed and graft, is on the verge of being torpedoed into the vast ocean of recession. 

According to the World Bank, Nigeria ranks 169 out of 189 countries surveyed in terms of the ease of doing business. The parameters used include the ease of obtaining construction permits, access to electricity, enforcing contracts, registering property and trading across borders. But as the economy worsens how prepared are we? That is the billion-naira question, the answers to which may be farther than ever imagined.

Interestingly, the CBN Governor, Godwin Emefiele had not too long ago given a warning signal that the country may be heading for an economic crisis. Going by the recent media interview granted by the Chairman of the Nigerian Governors Forum (NGF), Abdulaziz Yari of Zamfara state, both the federal and state governments have been on a borrowing spree, mind you just to pay salaries! And this has been going on for upward of two odd years.

He says that while the federal government enjoys the luxury of long-term loans to be paid back over a period of twenty years, the states must make refund in only four years. How does this sound to your eager ears?

This sordid scenario however, ignites the fundamentally burning questions. How come that some of the same state governors who are unable to pay the long-suffering workers have no tangible infrastructural development projects, or job-creation strategies in place to show for the billions of the so called Federal Allocation they have been collecting over the years? How can they justify the sad fact that some of them have been globe-trotting in expensive, state-owned jets in search of elusive foreign direct investment? What about those who have been throwing lavish, ego-tripping parties for their kits and kin, and others secretly building mansions, where they hope to rest after the odious deed has been done? Who, really is fooling who?

Worse still, our ‘sweet’ crude oil may no longer hit the benchmark of $120 per barrel, over the next two years. Between $70 and $85 may be more like it. Yari cites India and China where annual revenue from the rail transport alone equates to what Nigeria earns from crude oil sales. Some economic eggheads surely have their thinking caps firmly on in those countries.

Still on the parlous picture painted about the economy, may we add that the stock exchange is far from being bullish. Investors are no longer smiling to the bank. Manufacturers are still groaning. In fact, the Director General of the Manufactueres Association of Nigeria (MAN), Remi Ogunmenfun says all is not well with the members and their huge investments. The steel sector is on the verge of collapse. Yet, it has the capacity to generate over half a million jobs if the long-prostrate Ajaokuta Steel Company was functioning effectively. According to Sanjay Kumar, the CEO of Steel Business, African Industries Group four of the steel plants in the country have been shut down. Many are currently operating at 30 per cent capacity. The sick sector to which N100 billion has been sunk, currently needs N60 billion injection to survive.

The challenge it faces is predicated on the continued importation of steel products thereby creating jobs for citizens of the exporting countries. This is in addition to the lack of input from experts on the sector before government’s policies are enunciated. Besides, government’s patronage is grossly lacking.

Both Yari and Ogunmenfun are therefore, canvassing for the diversification of the economic base from oil to agriculture, solid minerals and infrastructural development. But we have heard this song before, have we not?

What have we done with revenues from the maritime industry, the customs and immigration services, taxes from the surviving manufacturing concerns and the entertainment and tourism industries, areas which if properly handled could generate more proceeds than oil?

The truth is that in the Nigerian experience political power has more often than not been acquired and appropriated by a clique of overtly avaricious, unpatriotic elements to build family empires. Yet, they expect to be applauded for their fratricidal feat. That explains the reason behind the wide, inexcusable gap that currently exists, on the one hand, between the nation’s vast natural resources and the parlous state of the economy, 55 years after independence. And on the other, between the very few rich and the millions of citizens caught in the terrifying trap of ignoble poverty. It also underscores the insulting situation that has the same set of faces or their ilk occupying our political space, since the eighties. How can we continue to recycle the same old faces with their archaic ideas and hope to ever move this great country forward? We are in the 21st Century knowledge-driven global economy, for God’s sake.

Obviously, the persisting power structure skewed in favour of the political class is both fraudulent and unsustainable. Something drastic has to be done, to reverse this drift to turning Nigeria into the patronage of the favoured few. It would make the so called ‘dividends of democracy’ to benefit those they are meant to-the people. Only that would make the much-touted ‘change’ mantra be meaningful to the populace.

For instance, it boggles the mind that Nigeria, an oil-rich country is responsible for some of the world’s most deplorable figures on the Human Development Index (HDI). A recent World Bank Report says about 80 percent of the citizens live on N250 per day even as the rate of unemployment hovers over 26 per cent, according to the National Bureau of Statistics (NBS). In a similar vein, infant and maternal mortality rates are inexcusably high while stunting, wasting, deficiencies of iron and iodine are prevalent amongst the under-5 children. In specific terms, Prof. Isaac Adewole former Vice Chancellor of the University of Ibadan while fielding questions as a ministerial nominee stated that over 40,000 Nigerian women die either during pregnancy or delivery while some 800,000 helpless children die from preventable diseases every year. Apart from being the largest contributor of HIV in new born globally, Nigeria loses between N1 billion and N3 billion to medical tourism, globally.

Similarly, Nigeria’s Gini-Coefficient stood at 48.8, as the country ranked 152 out of 183 countries according to the World Bank, World Development Indicators (2013). That figure was worse than that of Egypt, South Africa, Ghana, Angola, Swaziland and even Rwanda. Gini Coefficient is a measure of the deviation of the distribution of income among individuals or households within a country; from a distribution value of 0 for absolute equality, to a value of 100 for absolute inequality.

It follows therefore, that any economic model/ mechanism, programme or project that would not substantially address these stark realities to return economic power to the people amounts to sheer self-delusion. Fighting corruption, noble as it sounds is not a new song to the eager ears of the long-suffering Nigerians. General Muritala Muhammad (of blessed memory) as Head of State took up the gauntlet with a focus to cleanse the Augean stable riddled by the rotten eggs in the civil service. That was before General Muhammad Buhari(then a military dictator) in collaboration with his Second-in-command, Major General Tunde Idiagbon(now late) came forth with the war against indiscipline(WAI). Over a decade later Chief Olusegun Obasanjo instituted both the e-ef see sea, (sorry EFCC) and i-see pee- sea, (sorry ICPC). The salutary aim of both was to rein in the monster of corruption even if it was later viewed by some concerned citizens as tools of treachery and weapons of witch-hunt against perceived political foes.

But what would add a new note to the anti-graft battle cry is if it is blind to political party affiliation, all-encompassing and holistic, going back at least to 1999, without any veneer of base sentiments. That is what has endeared the recent call by former Senate President, Ken Nnamani to the heart of patriots. And of course, ensuring that the recovered loot are judiciously expended, in terms of specific stable infrastructure and job-creation strategies put in place.

Our leaders are well admonished to watch their dance steps to the deafening drumbeats of the Western World, lest we move from the sandy village square to the marshy miasma of the ocean shore. Self-interest remains the refrain of their clamouring chorus.

We keep listening to sound and robust ideas propagated every blessed year by global experts at National Economic Summits. They are proffered as lasting solutions to our multi-faceted and self-inflicted economic woes but domestication and implementation remain the missing factors in the socio-political equation. Therefore, as the government raises the proposed N25billion anti-recession fund, one hopes it has had a thorough thinking through. This has become imperative so that it would provide more stable infrastructure (electric power, water supply, good access roads and modern rail system) to open up the rural areas and facilitate job creation, especially via modern agricultural practices.

If indeed, we are truly desirous of moving this country to economic sanity, our political helmsmen have to toe the rough road of self-sacrifice, for now. The constitution must be thoroughly reviewed to enthrone true fiscal federalism. If the Chief Obafemi Awolowo-led administration could institute free education in the then West Region using revenue from the export of cocoa beans how come that some five decades later, and with trillions of oil revenue earned our successive leaders have failed to give us common stable infrastructure?

In the light of the insidious leadership failure, the Buhari-led government has to revisit the National Confab Report as inspired during the Jonathan-led administration. Let us put political sentiments aside and call a spade by its name. Both political and more so, economic powers may have to return to the six geo-political zones. Let them control their natural resources and pay about 25 percent of revenue to the centre. This would not only engender faster-paced development at the state and local government levels but reduce primordial ethno-geographical feelings of mutual distrust. The persisting agitation for the realization of the Biafra dream is a clear pointer to this assertion.

That done, not a few states would key into my continued suggestion that all political office holders should be placed on civil salary scales, at both the state and federal levels. Law making should be on part time basis. Our leaders must live with the people, share in their daily drudgery, feel where the shoes pinch them and do away with the obnoxious ego of using power purely for self-aggrandizement.

Also significant is for us to glean a lesson or two from other countries which have experienced economic recession and how they scaled over such hurdles. India, Malaysia, Singapore, United Arab Emirate and African countries such as South Africa and Ghana are worthy models in that regard.

And even as we ponder over how to redeem the nation from the present economic woes, on the short run, let us restructure our current education system. The aim is to prevent our youths from falling victims of the self-inflicted ills of the older generation. We have to institutionalize skills acquisition with a focus on technical education as recently suggested by Professor Isaac Adeyemi, the Vice Chancellor of Bells University,Ota. The increasing need for entrepreneurial studies should be encouraged and sustained but tailored to our immediate needs.

Besides, the true features of Nigeria’s history should be taught and made compulsory for students up to the university level. Our children should not repeat the mistakes the self-seeking elders have bequeathed on the redolent polity.

All said, economic recession is now a clear and present danger. It looms with the likely removal of the highly contentious issue of oil subsidy. It haunts us with some countries shunning our crude oil. It beckons with trillions of naira spent on combating the Boko Haram insurgency. It boggles the mind with increase in all manner of taxes and their attendant spin-off effects on the prices of goods and services. So, how prepared are you, my beloved brothers and sisters?

Truth be told, recession will bring with it, hike in school fees that may affect the livelihood of the average Nigerian household. Labour crises will brew with demand for higher wages. There will be increase in heart-related illnesses such as high blood pressure, stroke and cardiac arrest that would be triggered by fear, anxiety and growing uncertainty of what tomorrow would bring. Crime rates may escalate and youth restiveness become an albatross. Are you still breeding more children than you can adequately cater for? Are you diversifying your business from luxury items to basic human needs? Are you saving for the rainy day? Do you have back up plans in terms of food security in the event that the worst happens?

- Ayo Oyoze Baje is a media consultant and public affairs analyst

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