It is clear and re-assuring that the Federal Government is desirous of and believably committed to getting the Nigerian economy back on course, out of its present recession and the excruciating suffering that the Nigerian people are going through. Gone, I believe, are those recent days of worry and frustration that the government is taking too long to frontally address the economic travails and doldrums that the country is beset with. Gone also are the exasperating glance-casting at the immediate past, where the economic rain started to pound us. Every layman in the street knew that the government had to begin to find solutions to the comatose that had seized the jugular of our national economy. Lest recession lapses into depression, it was time the government came out with immediate, medium and enduring solutions to our economic recession.
In the last two weeks or so, government agents, from the Finance Minister to the Minister in charge of planning, have come out with clear statements as to the direction that the government must go to reflate the economy. Realizing that recession is upon us, occasioned by the failure of the past to get out of the oil and gas, near-mono-cultural economy and the several decades of deception called oil boom, which as we now know, to our national chagrin, has become our oil doom, diversification is the long-term solution that the nation, led by its government, must embrace, without looking back. The immediate problem needs an immediate solution, in the short term, as we surge forward to the medium and long-term resolutions. The problem which stares the nation, starkly in the face is that there is drastic cut in oil production, largely due to the painful negative actions of the militants, especially the Niger Delta Avengers, who, in spite of the ceasefire agreement and the dialogue being led by the Niger Delta Elders with the Federal Government, still struck, by their claim, at the Bonny Crude Export Line, in what it describes as a warning shot! Besides militancy and the drastic reduction in production of oil, there is the colossal drop in the global price of oil, its crushing effect on our foreign revenue earning and other sectors of the nation’s economy. By January 2016, the revenue from oil has shrunk frightfully from N370.38billion to below N20b now. What is to be expected if the global price has slumped from $120 per barrel to $42 per barrel. The Nigerian currency has crashed beyond recognition and the effect of recession upon the populace is worrisome. It is no wonder then that government has decided to take urgent, if drastic contested steps, to halt the slide and steer the ship of State out of recession.
The immediate actions, which are being supported and opposed from different standpoints of the nation’s economy, include, as has become familiar, the sale of some national assets; between 20% and 30% of the Nigerian National Liquefied Gas (NNLG); the NNPC will be touched through a reduction of government’s share in the upstream oil joint venture operations; the sales of the government’s stake in some financial institutions such as the African Finance Corporation; advance payment of license renewal infrastructure concessioning, and the privatization or concessioning of some airports and refineries, among proposed steps. Many sound economic and business minds see these intended actions of government as inevitable. The government needs to raise funds at between $15billion and $20 billion take us fast out of the current recession to boost our foreign currency reserves and shore up the balance sheet so as to be able to fund critical infrastructure in a way that will persuade foreign investors that the nation is investment ready and to stimulate the economy by injecting money into it so as to ensure liquidity as was done by many super powers including the United States of America, Japan and Europe. As I averred above, these propositions are, perhaps, expedient and not entirely new measures taken elsewhere in similar situations.
As it turns out, partly based on past experiences, especially with regard to the sales of national assets, where promises were not kept on effect on the ordinary citizens, there are strident oppositions. Labour and the civil society have kicked against the sales of national assets. Radical persons and activists also frown upon the proposition because of the parlous state of earned wages in the face of grueling hardship. Even the Senate, in apparent defiance of the obvious body language of their President, Dr. Bukola Saraki, in his probable support of the need to raise funds to enhance foreign reserves through sales of asset, voted against sales of some national assets.
It is a critical moment for the government and I believe for all of us. No question, some steps have to be taken at this point in time with regard to the need to complement the fiscal stimulus and the generation of funds to finance the 2016 budget is crucial. Government position is that if it cannot finance the priority areas of the budget which include infrastructural build, the cushioning of the suffering of the masses by reflating the economy, the recession will certainly worsen. It is possible to argue in favour of the steps government wants to take, especially given the fact that there is ample evidence in the disposition of the President that the failure of the past with regard to sold national assets will not recur. The present situation in which the international community has demonstrated satisfaction with the President regarding his succeeding effort to raise the profile of the nation is helpful. The United Nations General Secretary has spoken in this vein. This is a positive recommendation for government which it must find a way of deploying to advantage.
There is also the question of what can be done in the medium and long terms. There is need to cut down on importation of items which are dispensable or those that can be locally produced. There is no reason why we should be importing rice or tomato and (ridiculous) tooth-pick. There is also serious talk from government figures, including the President himself about the inevitability of diversifying our economy, especially in the areas of Agriculture (which used to be the mainstay of our economy until the arrival of oil), rapid industrialization, mining and so on. I am persuaded that this is the time to face the cultural and creative industries of our nation which have the capacity for huge revenue generation, job creation and massive reduction in the poverty level of our country. Some of these are in the not-too-long terms, if we put our national hands on the plough and rescue the nation from the tragic economic doldrums that have befallen us.
No doubt, the hostility of labour and the civil society to the proposed sales of proportions of our national assets is informed by the current state of affairs in the country in which the working people of the country are living under intense hardship. All prices have sky-rocketed as inflation gallops. The prices of food items and other materials of livelihood have been taken beyond the reaches of the ordinary citizens, while the earnings of labourers at all levels have not changed and are in fact badly diminished by the huge devaluation of the national currency. There is a lot of cynicism among the working class, even as there are unhidden fears that things may worsen.
Yet, as I see it, the dilemma on the ground resembles the Yoruba aphorism. The river has over-flooded its banks and the king has a message that must be delivered across its banks. This is the time to resolve this dilemma and government needs to intensify its persuasive mechanisms, find ways of reaching the people and generate their confidence in the actions that it needs to take in the short run. It is not an enviable situation but government has to find its way around it.