‘Nigeria must address recession without IMF, World Bank’

The Federal Government of Nigeria (FGN) must look for a way of tackling the current recession experienced by the country without following International Monetary Fund (IMF) and World Bank formula.
The Principal Consultant of B. Adedipe Associates Limited, Dr. Biodun Adedipe, stated this at the 2016 Nigeria Deposit Insurance Corporation (NDIC) workshop for Business Editors and Finance Correspondents Association of Nigeria (FICAN) in Kaduna.
He pointed out that the recession currently experienced by Nigeria started at the last quarter of 2013 as the nation’s foreign exchange earnings started depleting from 2014.
Jack Lew, US Treasury Secretary stated recently that: “All major economies need to deploy a full toolkit of economic policy measures, including monetary and fiscal policies and structural reforms to address weak demand, boost employment and raise standards of living…”
According to Adedipe, the full kit for Nigeria would include fiscal, monetary and commercial policy harmonization. Spending massively to drive inclusive growth and be ready to live for the time being with inflationary implications. Stimulus across all policy plants, focused on “made in Nigeria” in production, consumption and trade activities. Boost domestic production and value added, devote particular percentage of public spending to goods and services produced in Nigeria and provided by Nigerian entities.
This, he further said, “is the best time to get ready for the impending economic recovery and stop whining about recession. The signs are already there, no doubt. Think what to do with the box, think outside the box and think possibilities. The recession is not all bleak, if it has a message that eludes most people, it is that recovery is inevitable. What you do then matters more than what you do during recession,” he said.
Also speaking in the same vein, Wutrika Dauda Gotring, Acting Director, Trade and Exchange Department, Central Bank of Nigeria (CBN), said investors can still retain confidence in a currency, even if the economy is in recession, depending on prospects for renewed growth and underlying competitiveness.
“The sustenance of flexibility in the Foreign Exchange (FX) market remains the most viable option for Nigeria in the light of dwindling external reserves and the motivation to drive exports and support import substitution consumption,” he said.
He listed the way forward for Nigeria to include diversification of the economy, increase investment in agriculture, mining and solid minerals, increase investment in infrastructure to lower cost of doing business, enhancement of local manufacturing capacity and import substitution. Others include policy consistency that would encourage capital flows and promote local production, fiscal discipline, increased implementation of the cashless initiatives and closer collaboration of the CBN with fiscal authorities.
However, the acting director said it is evident that Nigerian economy is going through though times with the decline in foreign exchange inflows and the continuous demand pressure for foreign exchange management remains one of the major tools the bank uses to influence economic activities. “Recession often shakes the confidence of investors, especially in a country like Nigeria with a huge import bill and external debt,” he said.