Economy analysts have warned the Federal Government of Nigeria on the possibility of the recently announced recession blowing into full depression, if spending power on infrastructure is not increased.
Financial experts, who spoke exclusively to the Daily Times of Nigeria (DTN), following the declaration by the Nigerian Bureau of Statistics (NBS) that the Nigerian economy had officially slid into recession for the first time in more than 20 years, said that Government needs to urgently address the challenges of infrastructural gap, policy inconsistency and fiscal and monetary policy mismatch so as to stimulate the nation’s economic development.
Reacting to the inquiry posted by our correspondent, Managing Director/CEO, B. Adedipe Associates, Dr. BiodunAdedipe, said that recession is bad news for all stakeholders, and it also demands creativity and pragmatism to reverse.
He tasked the government to provide leadership by spending more, especially on infrastructure to prevent a full blown depression and push for economic recovery.
Adedipe, further charged the government on the need to make business environment more conducive, ensure policy alignment with expansionary necessity and press more into transparency and value for money spending.
According to him, “the government needs to revisit the exchange rate policy — the current arrangement is counterproductive for an import dependent economy with weak real sector like Nigeria.”
Also, speaking on this development, Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, said that with the economy going into a deeper recession, there is every likelihood of more job losses as consumer demand decline further.
“I think that our economic managers at both the fiscal and monetary sides need to evolve coordinated stimulus response to inject liquidity into the System and reverse the economic decline”, he said.
He, however, urged the nation’s economy managers need why emphasis should be shifted from fighting high rate of inflation but to intensify efforts in restoring economic growth.
In a similar direction, Director-General, Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, said government should work to rekindle investors’ confidence in the economy because capital and investment flows from investors are needed to complement government’s developmental drives.
His words, “government can rekindle investors’ confidence in the economy by the quality and consistency of its policies.”
Also, Senior Economist, Africa and Middle East, Bloomberg Intelligence, Mark Bohlund, noted that Nigeria will be left behind if it fails to fix the power problem.
He also underscored the importance of strict adherence to rule of law as this will drive investment inflow into the country.
Meanwhile, the Minister of Finance, Mrs. KemiAdeosun, has admitted that Nigeria is in its worst possible time with the Gross Domestic Product,GDP, according to figures for the 2016 second quarter by the National Bureau of Statistics which confirmed the nation’s economy was in recession.
She said the nation has a long way to go and the government was not deceiving itself that all was rosy.
According to her, “It’s the worst possible time for us. Are we confused? Absolutely not,” the minister said.
She, however, identified some of the ways the country could get out of recession to include diversification of the economy and investing in capital projects.
She said, “How are we going to get ourselves out of this recession. One, we must make sure that we diversify our economy. There are too many of us to keep on relying on oil.
“We can see what happened at the output data of the oil and gas sector. What’s happening in the Niger Delta has dragged down the GDP of the entire economy. We are too dependent on oil, whereas 87 percent of our GDP is non-oil. So let us drive those other areas.
Leave a Comment
You must be logged in to post a comment.