By our Correspondents
Moved by the statement by the National Economic Council that the economic recession induced by the COVID-19 pandemic worldwide was inevitable, economic analysts, market operators and stakeholders have taken new measures that the federal government must take to ensure that the country leaves crisis more quickly.
After its monthly meeting chaired by Vice President Yemi Osinbajo last Thursday, NEC announced that the economy was heading for another recession after the economic blockade ordered by countries in the world, including Nigeria, to reduce the spread of the coronavirus.
Speaking exclusively to LEADERSHIP over the weekend, stakeholders, including manufacturers, economists and traders, insisted on the need for the government to boost an attractive economy for foreign investors, ensure adequate financing for critical sectors and initiate definitive reforms, such as sector deregulation. downstream oil and public-private partnership (PPP) in infrastructure development.
Lead researcher at Agusto & Co, Jimi Ogbobine, emphasized that, although the recession is a result of the global pandemic, the best thing the Nigerian government can do is to mitigate, as the country cannot completely end the crisis.
He said: “The first thing we need to do is to recognize the health crisis before the economic crisis. We need to solve the underlying health problem and, as much as possible, we need to contain it. Tests, contact tracking and isolation must be done, because the more infected we have, the worse it will be because it means that we may require more blocking, more quarantine and more curfew.
“Anything else we do to the economy without addressing the underlying health issue will be like pouring water into a basket. We then need to address some economic issues. For example, the government has done some things with sectors like oil downstream. We need to carry out this type of reform.
“The government says it is not deregulating, but that it is time to deregulate completely. Fuel prices are low; it won't cost us if we completely deregulate. In addition, now is the time to pursue macroeconomic reforms. Exchange rate policy, for example; the Central Bank of Nigeria (CBN) is unlikely to have its hands very deep in the market. It should allow market forces to determine prices ”.
For his part, the managing director of Cowry Assets Management Limited, Johnson Chukwu, asked the government to improve the investment and the economic environment to make it attractive to investors.
He stated: “As it is today, we need external capital injection to reduce the time we are going to spend in the recession. We need to access resources in addition to our oil revenue and that revenue will come from foreign direct investment (IDE) and foreign portfolio investment (FPI). So, we need to open up the economy. In the downstream oil industry, the current drive to deregulate this sector is very critical to freeing up economic resources and making it attractive to investors.
“The second aspect is that the government must ensure that it continues to be a major consumer in the economy. For that to happen – because the revenue will collapse – the loans that the government is making are critical, and then how it spends the loans is just as important.
“In addition to the US $ 3.4 billion from the IMF, any amount we receive from AFREXIM Bank and the World Bank must be channeled to infrastructure. If you invest in infrastructure, you create job opportunities to compensate those who lose their jobs in the private sector.
“The government will have to take some of the slack in the economy by creating new jobs as the private sector is shrinking. Another aspect related to the attraction of foreign capital is that, as it is, the government does not have sufficient gains to build infrastructure.
“Therefore, we need to change our approach to infrastructure development and seek private involvement in some of these infrastructure gaps. That way, we will be able to bring some capital into the economy. For example, what has been done in the telecommunications sector, we can replicate this in the energy sector, as well as in railways, road infrastructure and ports.
“If we get capital to build this infrastructure, we will improve the ease of doing business, Nigeria's competitiveness and we will also provide support for rapid economic growth. If we attract foreign capital, we will probably come out of the recession more quickly, because that foreign capital will resolve the deficit we have in our oil revenue.
“In addition, we expect CBN to seek to harmonize the exchange rate so that we can have a uniform exchange rate, critical to attract FDI and FPI. Investors want a liquid market in the foreign exchange space – several buyers from several sellers, which is an almost perfect market situation, instead of what we have now, which is a single market creator who receives all the input and then allocates forex ”.
Akin Ajayi, a specialist in management and corporate governance, said that in times like these, the federal government should be bold, creative and deliberate, adding that the government should invest in infrastructure-related projects in a recession, in addition to the widely expected palliative measures to the Economic Stabilization Committee, chaired by the vice president.
"The federal government may have to revisit the $ 22.7 infrastructure project loan," he said, noting that the energy sector is also another critical area on which the government should focus and be deliberate.
He noted that the constant supply of energy would stimulate production growth in the micro, small and medium-sized enterprises (MSMEs), manufacturing and industrial sectors, thereby creating jobs for millions of Nigerians.
According to Ajayi, the government must rapidly diversify the economy.
He continued: “There must be a deliberate focus on other sectors, especially agriculture, technology, trade, investment and education. Considerable growth in the production of these sectors would be good for the economy.
“Finally, the government must encourage incentives targeted at key sectors. Incentives such as import tax exemptions should be extended to the agricultural and industrial sectors to encourage job creation and poverty reduction. "
For his part, the director general of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, agreed with the position that recession is inevitable for the Nigerian economy.
He said the fundamentals are weak, the foreign reserve is under pressure, the naira exchange rate is depreciating rapidly, investor confidence is low, purchasing power is weak, purchasing power is weak, inflationary pressure is increasing and the government's fiscal viability is at risk.
Noting that all of this naturally predisposes the economy to a recession, he said: “Unfortunately, COVID-19's response strategies further complicated the economy, travel restrictions, interstate movement blocks and persistent blocking of some critical economic activities.
“The gradual release of the lock is a step in the right direction. But this needs to be done with caution to avoid an escalation in the transmission of the virus by the community ”.
Yusuf noted that it is necessary to redefine policy and the regulatory environment to stimulate domestic and foreign investment. "The mix of tax, tariff, monetary, exchange and investment regulatory policies needs to be regularly rejected to stimulate economic growth," he added.
In the insurance industry, signs of recession are visible as the sector is gradually experiencing low policy renewals, while a significant number of policyholders are beginning to devalue many of their insurance policies and restructure them as they focus on survival in the middle of the process. adverse economic conditions.
An insurance consultant, Ekerete Gam-Ikon, said: “We cannot be fully prepared to respond to economic, political or social crises without insurance. We must explore the benefits of insurance.
"Currently, there are more discussions about risks and citizens are open to receiving useful information about solutions and insurance, which can become a hot topic in the speech."
He instructed Nigeria's insurance industry leadership to take the opportunity to inform the public and invite them to adopt insurance policies.
Speaking to LEADERSHIP, managing director of Jacobs Wines, Mr. Udemba stated that, except that the productive sector is empowered through CBN interventions, Nigeria may have to deal with the impending recession for a long time.
He said that "the role of commercial banks in the economic development of any nation remains paramount, therefore, the activities of these banks are of primary concern to monetary authorities.
“As financial intermediaries, they serve as resource mobilizers for the economic units in excess of the economy and advance to the units with a shortage of financial resources. Governments around the world, in an attempt to develop an efficient banking system, tend to focus on the activities of commercial banks due to the central role they play in the development of a robust economy and Nigeria must apply similar measures ”.
Udemba said that the high interest rate on manufacturing and investment should be revised downwards to increase domestic investment and the real sector, noting that it is difficult to increase domestic investment at current interest rates, especially in the real sector.
For his part, the national vice president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Ahmad Rabi'u, called on the federal government to create an enabling atmosphere to reduce the impact of the inevitable recession.
“With events in the world and in Nigeria, the people's effective demand power will be weak as a result of inflation. The recession will take effect. The government can only think of the best way to minimize the impact, ”noted Rabi & # 39; u.
The national president of the Association of Senior Petroleum and Natural Gas Officials of Nigeria (PENGASSAN), Comrade Engr Ndukaku Ohaeri, noted that there is an urgent need for the country's economic managers to make conscious and deliberate efforts to create a robust economy that improves effective participation all and improve the per capita income of Nigeria's current population in the shortest possible time.
He also asked the government to encourage the skills acquisition center to acquire digital skills, adding that it is essential for the future as one of the ways to create more jobs and generate wealth.
In his contribution, the general secretary of the Federation of Nigeria's Informal Workers' Organizations (FIWON), comrade Gbenga Komolafe, said that it mitigates the negative socio-economic impacts expected from COVID-19 in the country, especially the bold, determined workers it takes. concerted review of existing micro and macroeconomic policies with well-targeted interventions.
He called for the demolition of all non-essential expenses included in the 2020 budget, including "the $ 27 billion budget for the renovation of the National Assembly Complex and $ 3.3 billion for the purchase of vehicles".
Komolafe urged the government to also reduce the federal and state budgeted security vote by at least 75%, to reduce the pay of all political positions, including president, governors, legislators, governors and other political positions by at least 70% cent , reduce the budget for travel abroad by government officials by at least 70% and raise taxes on luxury expenses like cars, properties, foreign drinks and other consumer items by at least 300%.
He also stated that the N3.5 trillion package announced by CBN should be carefully invested in increasing local production of medical equipment, in agricultural value chains, in large social housing (not in the existing housing system and property development driven by developers who historically proved to be absolutely incapable of meeting housing needs) and expanding health infrastructure
In addition, northern state governors were advised to diversify the region's economy to mitigate the effect of the impending economic recession predicted by the National Economic Council.
Two labor leaders in the state of Kwara, comrades Abdulmumeen Onagun and Umar Akanbi, told LEADERSHIP in Ilorin that governors could diversify the economy of the northern region by reviving dying industries in their various states.
Comrade AbdulMumeen, who is the president of the Labor Party in the state, said: „I think it is time for the northern states to look for divisions when it comes to the issue of revenue generations. For example, several states, particularly in the north, are blessed with mineral resources that are not being explored. Now is the time to take proactive steps on this.
“Agriculture must also receive its legitimate position in the north, since some of the products of this venture may be real, generating revenue to contain the impending economic recession.
“The holistic review of revenue-generating mechanisms needs to be considered as a lot of wealthy and tax-rich individuals in the United States often avoid taxes and wealthy and influential members of society are subject to taxes.
“Prudence on the part of the various state governments needs to be taken into account by reducing expenses; A number of political office holders need to be minimized far beyond the attitudes of Santa Claus' governments at times, as the realities of the situation will have to be addressed directly. Travel by government officials inside and outside the country needs to be simplified to help reduce governance costs.
“The lifestyles of our various state executives must sincerely demonstrate current economic realities. Governments at all levels will have to prioritize citizens' needs to ensure that only the urgent and life-saving are considered for implementation. „
For his party, Comrade Akanbi, former president of the Nigeria Labor Congress (NLC) in the state, noted that there is an urgent need for northern governors to revive the dying industries in their states.
He said: “This will certainly improve the states' economy and improve their internally generated revenue (IGR). We have textile, matches and agricultural companies in the 19 northern states that are now dying.
"These industries must be revived to provide employment for our unemployed youth, in addition to generating more resources internally to increase allocations to the federation's account."
Also a Kano economist, Shammasu Muhammad, postulated that the northern states should adopt the Keynesian model to resolve the situation.
He said states should step up public works, such as road construction, to involve more people and revitalize the economy, adding that, as a government, they have the means and means to create money and jobs.
Muhammad said that state governments, especially in the northern region, can buy bonds like Sukuk's and get returns on investment.
He said that industries must be maintained and supported, making money in the hands of people, raising the economy upwards.
The master's degree in oil and gas economics at the University of Dundee in Scotland said that the future of oil is still promising in the medium term, but other sectors such as agriculture will cushion the effect of the recession.
The sole administrator of the Borno State Chamber of Commerce, Industries, Mines and Agriculture (BOCCIMA), Alhaji Ahmed Ashemi, urged northern state governors to embark on the agricultural revolution that had been the northern backbone.
Ashemi also criticized what he described as an emerging trend among governors in northern states where government purchases are made under direct labor, which enriches the few and impoverishes the large mass of Nigerians.
The BOCCIMA chief noted that for the agricultural revolution to thrive in view of the insurgency and banditry that plagues most northern states, governors must insist that the federal government make agricultural communities safe for agricultural activities.
He said: „The backbone of our economy in the north is particularly agriculture. And you can see that most northern states are struggling with insurgency and banditry. Northern governors must ensure that they impress the federal government to make farming communities safe for agriculture to thrive.
“In a recession like this, the only way for the north to recover is the agricultural revolution. Many state governments, particularly the state of Borno, are doing well in the agricultural area, but there is one aspect over which they have no control, which is the insurgency.
"So if they want us to get out of the recession, they must impress the federal government to ensure that farming communities are protected, so that people can get back to farming massively."
He also said that government spending should be directed to aspects that will put money in citizens' pockets.
He noted that today across the country there are emerging trends in which government purchases are made directly by direct labor, which only puts money in the pockets of public and public officials to the detriment of the larger population.
In addition, Alexander Molwus, an economist and former head of Plateau Investment and Property Company (PIPC), told our correspondent that the recession is bound to happen, regardless of whether there is COVID-19 in the country.
According to him, while the federal government was just finding solace in the COVID-19 pandemic, the federal and state governments are the cause of the impending recession, as they continued to play hypocrisy while waiting for globalization to get money.
He regretted that Nigeria is a slave to the international market because the country has continued to borrow from all sources, adding that the basic issue of the recession depends heavily on oil, and the commitment of oil resources has made things difficult.
“The government must be sincere in the domestic production of goods and services. We borrowed and wasted before COVID-19. If we decide to close the source of foreign loans, it will be a long road for the country. "
Also speaking, Professor Ademu Wada, from the Economic Department at Jos University, said the impending recession is not a product of COVID-19, emphasizing that the federal government is playing on the country's economy.
He stressed that democracy is a collective responsibility, while the market economy is about individuals, saying that the federal government was playing with diversification, which has kept us where we are today.
Wada added that government at all levels must take the lead in business and be ready to invest in manufacturing.
He called for reforming the dying textile industries of mass production, emphasizing that the government cannot encourage growth without production.
“The government at all levels must invest in agriculture, mobilize rural farmers with inputs and seedlings at an affordable price. Mechanized agriculture is not helping us. The government must face the insecurity and the invasion of the shepherds to encourage the local production of agricultural products in the country ", he affirmed.
PMB insists on local food production, no longer says money for imports
Meanwhile, President Muhammadu Buhari has challenged Nigerian farmers to embark on massive food production this agricultural season, saying the country no longer has the money to import food.
The president declared this yesterday, while celebrating Eid-el-Fintr and observing Eid prayers with members of his family in the presidential village, in accordance with the guidelines of Sokoto Sultan Sa & # 39; ad Abubakar III and the presidential task (PTF) in COVID-19.
LEADERSHIP recalls that President Buhari had canceled on Friday the traditional tribute to Sallah that he made every year for Muslim believers and residents of the Federal Capital Territory.
He said he would be conducting his Eid prayers with his family at home, as instructed by the sultan.
Noting that there is no more money to import food, Buhari said: “I hope that the rainy season will be abundant so that we can get a lot of food. I would like farmers to go to farms and save lives, so that we can produce what we need in sufficient quantity, so that we don't have to import food.
"Anyway, we don't have the money to import food. So we need to produce what we are going to eat. & # 39; & # 39;
Speaking after Eid prayers yesterday, Buhari asked all Muslims to continue to reflect on the lessons and virtues of the season and to support them beyond the celebrations.
On the COVID 19 pandemic, President Buhari reiterated his advice to Nigerians to strictly adhere to the guidelines and measures adopted against the spread of the deadly virus in the country.
He noted that the pandemic had reduced developed and developing countries to the same level, just as he advised Nigerians to always be careful in order to avoid infections.
He said: “Nigerians can see that COVID-19 has reduced us, both to developing and developed countries, to the same level. In fact, we have fewer casualties than they do.
"So it is a very frightening development and I advise Nigerians to be very careful and follow the advice of the Ministry of Health. Ministers of Health have been doing very well, talking and educating citizens about the deadly virus."
First Lady, Hajiya Aisha Buhari, who also observed Eid's prayers with the President, thanked Almighty God for sparing the life of the Muslim Ummah during the Ramadan period.
Aisha ordered Nigerian women to remain at the forefront of the fight against the Coronavirus pandemic across the country, while praying to Allah to forgive the sins of those who lost their lives as a result of the virus and to grant it to Aljanah Firdausi (Paradise).
“We must thank the almighty Allah for the successful completion of the holy month of Ramadan, despite the difficult current circumstances in which we find ourselves. I want to thank the Federal Ministry of Health and also the NCDC for their efforts in combating the pandemic & # 39; & # 39 ;, she said.
Elumelu, World Leaders to Discuss Africa's Post-COVID-19 Recovery
Meanwhile, the president of United Bank for Africa (UBA) and the founder of the Tony Elumelu Foundation, Tony Elumelu, will today moderate a high-level leadership panel to discuss Africa's post-COVID-19 economic recovery in the 2020 edition of the Conversations UBA Africa Day.
Elumelu would be joined by decision makers from around the world, including the presidents of Senegal, Macky Sall and Liberia, George Weah, as well as United States senator Chris Coons.
African presidents and global leaders will join the panel by other global leaders, including the chairman and chairman of the board of directors of the African Bank for Export and Import (Afreximbank), Professor Benedict Okey Oramah; president, International Committee of the Red Cross (ICRC), Peter Maurer and president and founder of the Forum of African CEOs, Amir Ben Yahmed.
With more than 60% of Africans living below the poverty line, the pandemic represents an existential threat to Africa's economic growth and this session will define the lessons learned and the roadmap for economic growth and sustainability.
Leaders will speak on the topic & # 39; Conversations on Africa Day at UBA 2020: growth, jobs and sustainable development amid a global pandemic & # 39 ;.
This will be the second edition of the symposium organized annually by UBA in celebration of Africa Day.
The open event, which will be held practically from 3 pm, is part of the activities to mark Africa Day, celebrated worldwide on May 25, to show the diversity and beauty of Africa and its people.
United Bank for Africa, with its pan-African presence in 20 African countries, New York, Paris and London, continues to lead the conversation and focus on the continent's development, growth and unity.