Many Nigerians are of the opinion that the government should dedicate the same energy used for fighting corruption to economic issues.
As 2016 winds up in a few days, expectations are high that the Muhammadu Buhari administration will focus more on Nigeria’s battered economy as the economic recession bites harder.
Although, President Muhammadu Buhari has said the 2017 Budget will take Nigeria out of recession, economic experts have disagreed with him.
One of the experts say the president’s optimism will be a ruse if adequate measures are not put in place by those in authority to ensure that Nigeria bounces back.
Bayo Ogunmupe list six ways Nigeria can get out of recession in 2017.
1. Examine our confused monetary policies
In the third quarter of 2014, the Central Bank monetary policy committee increased interest rate to 13 percent and stayed there till November 2015. Thereafter it was cut to 11 per cent.
In March 2016, this rate was raised to 12 per cent and then in July, it was raised again to 14 per cent.
However, between May 2015 and November 2016, inflation doubled from eight per cent to 17.7 per cent. This inconsistency in policy should stop. Since we have opted for a fixed exchange rate, we either have monetary autonomy or capital mobility.
2. Float the naira continuously
The naira will depreciate as it had been doing. Going for loans elicits a range of policy options in a developing economy like Nigeria. We have to abide by the terms of our lenders. Continuing our current policy will result in high inflation, low investment and high unemployment.
These short term pains are inevitable. We must pay the price in hunger for not saving for the rainy day. Such a new policy option will be followed by higher investment and a sustained period of low inflation with higher growth.
3. Boost employment
We need the enthronement of a National Full Employment Plan (NAFEP) with special funds to prosecute it. To make it a proper palliative, NAFEP loans should be collateral free, interest-free and used mainly for import substitution enterprises.In these dire circumstances, the Buhari administration must push forth aggressive initiatives.
Recently, the African Development Bank approved $56 billion to scale up industrial development in Nigeria. In the medium term, industrialisation must be the catalyst of the job creation category of the Nigerian development effort. The government must support this effort with a favourable business environment, access to the capital market and competitive entrepreneurship.
4. Nigeria must ensure further cooperation with China
Cooperation with China provides the potential for substantial project financing at low interest rates. The efforts to accelerate the development of our infrastructure through Buhari’s state visit to China last April are commendable.
5. Government must protect fiscal sustainability at all costs
Even as this might exacerbate external imbalances. Most importantly, Nigeria must execute structural reforms for sustained and inclusive growth.
6. Embark on structural reforms
This should start from the merging of states to reduce expenditure, reduction of staff strength of the civil services of the states and that of the civil service of the federal government. The National Youth Service Corps (NYSC) should be scrapped. It serves no useful purpose in a depression. We can no longer finance it.
The refineries should be sold to leave the Nigerian government with a maximum equity of 30 per cent. Ever heard of a government-owned refinery in the United States? As the global economy continues to deteriorate, the time to accelerate policy responses is now.