How can Nigeria revive its economy?
The Federal Government should pump money into infrastruture development, which will create more jobs and boost liquidity, economists and private sector players said yesterday.
The Nigerian Bureau of Statistics (NBS), in its Second Quarter Report released on Wednesday, said the economy contracted by 2.06 per cent to record its lowest growth rate in three decades.
The report said the economy shrank by 0.36 per cent in the first quarter of 2016 to hit its lowest point in 25 years. Unemployment grew from 12.1 per cent in the first quarter of 2016 to a record high of 13.3 percent in the second.
Finance Minister Mrs Kemi Adeosun said: “It’s the worst time possible for us”. She, however, assured all that things will get better.
President Muhammadu Buhari said yesterday that Nigeria will be prosperous again. He spoke in Osogbo the Osun State capital, at the inauguration of a mega school built by the Rauf Aregbesola administration.
A development economist and financial Expert, Odilim Enwegbara, who is the Chairman/CEO at Pan Africa Development Corporate Company (PADCC), said the government should leverage on its expansive revenue base and spend its way out of the recession.
He said: ”To help our economy, the government needs to pump trillions of naira into infrastructure projects and trillions of naira into social intervention policies so as to make more money available to the citizens to boost their purchasing power, which will make these cash-strapped citizens start consuming, not imported goods and services, but mostly locally made goods.”
By consuming locally made goods, Enwegbara said, more money will get into the hands of local people and artisans. This, he said, will kick-start the once excluded grassroots economy.
In his view, President Buhari needs to inject a minimum of N3 trillion annually into the economy.
”Buhari’s social interventionist policies too should, besides making the school feeding programme a priority, monthly stipends of not less than N10,000 (instead of N5,000) should be given to millions of our poor families, widows, elderly, mentally and physically- challenged Nigerians. This should be promoted with the rigour it requires.
Lagos Chamber of Commerce and Industry (LCCI) Director-General Muda Yusuf spoke of an urgent need to inspire investor confidence by ensuring that policies are not only credible and sustainable, but also consistent.
He described this measure as critical in building the confidence of investors, adding that there is the need for the injection of private capital by domestic and foreign investors to turn things around.
Yusuf called for government’s stimulus spending to fast-track the growth of the economy, including the speedy implementation of the 2016 budget.
He said this could have very clear positive impact in pulling the economy out of the woods.
According to the LCCI chief, the energy issue has remained a sore point as a result of the poor supply and the high cost of gas, which in most cases is not available.
He said: “Economic empowerment of majority of our citizens by increasing the purchasing power of the economically excluded is the magic wand which increasing their consumer power should increase production and new jobs. In other words, if by empowering the marginalised and excluded millions deep-seated economic malaise will finally be resolved.”
The Vice President (North West Zone), Manufacturers Association of Nigeria (MAN), Ibrahim Usman, said to move away from recession, the government must embark on infrastructure development to attract money into the system.
He said in other climes, the government drives the economy, giving it direction, but he admitted that there is no quick fix to get out of the recession.
Usman, who is also the Executive Chairman, Powerseal Nigeria Limited, called on the government to quickly end the Niger Delta militancy issue.
The economic think tank of Financial Derivatives Company Limited, led by Bismark Rewane, expressed optimism that “the lower-than-expected figures for July signal a possible tapering in the rate of increase in consumer prices which might improve market sentiment.”
Usman added that market players “are expected to react accordingly”.