Nigeria is ailing and it is difficult not to be worried. The global economic shock occasioned by COVID-19 has finally dealt a huge blow on Nigeria’s economy that has before now been on life support. The implication is that a vast majority of our population has now been left in the proverbial lurch trying to make a sense of what is left. From dwindling government revenue, poverty, unemployment, and now massive job losses, Surely, all is not well for Nigeria.
The Private and informal sector are greatly threatened by what has been described by Herbert Wigwe as armageddon. The fall in the global commodity prices has once again revealed that our overdependence on oil was only a ticking time bomb. At the last time I checked, the federal government has even gone on a borrowing binge, the Federal Government recently got approval to borrow N850 billion locally, on the same day it received another $3.4b from the International Monetary Fund (IMF), while we have also gathered that the government is also planning to borrow another $3.5b from the World Bank. Scary!
A lot of State Governors are already speaking to their workers to take a pay cut or salary slash as we call it, in fact, I hear that one of the governors in his first term said in private that this is not the best time to be governor. Quite truly, but I have no sympathy for the ruling class at least for now because they got us here in the first place. Any state Governor that cannot think of ingenious ways to sustain its workers at this time had no business running for public office in the first place, governance was never for the faint-hearted, it has always been serious business for the visionary, courageous and bold, save for Nigeria where governance has been reduced to an all-comers affair!
In response to the new reality, a number of corporations and multinationals are already downsizing and cutting down on operational costs, including salary pay cut for most of their employees. Arik Airlines was the first known corporation to come up with such tight measures and extreme adjustment after it suddenly asked 90% of its staff to proceed on leave without pay. Similarly, Access Bank one of Nigeria’s biggest financial institution has also revealed that it would be doing away with about 75% of its workforce in response to the shock. Here, I am even more worried about the informal sector, that currently employs more than 80% of Nigeria’s Labour force. The impact of this economic shock on MSMEs is expected to be more severe and the implication is that Nigeria’s unemployment figure is expected to rise in the days ahead.
I am surprised that while a lot of Nigerians are already losing their Jobs, Nigeria’s President Muhammadu Buhari appears unperturbed and unalarmed, he is carrying on like all is well! I am yet to see him grant interviews, call press conferences, or even roll out a legislative agenda or fiscal plan to stem the new wave of job losses. The only response I have seen from President Muhammadu Buhari’s led federal government is to borrow to the hilt, an approach that cannot save the country.
Similarly, I read somewhere that some state Governors and their cabinet members have also agreed to take a pay cut, but we all know this is cosmetic at best and that what Nigeria needs at this time is not a makeshift but a structural adjustment. Unless President Buhari makes the needed structural adjustment and redirect the economy from overreliance on oil, it will be difficult to salvage the jobs.
At the moment the fundamentals of the Nigerian Economy can barely move a needle, because let’s face it Nigeria’s current GDP growth at an average of 2% is grossly inadequate, when compared to our population growth at 2.7%. When you put this side by side with the sad reality that our manufacturing sector is almost dead and our productivity as a country is extremely low. It is sad not to admit that the present is bleak and the future does not appear to offer any hope.
Just like the 2008 global economic meltdown, the impact of COVID-19 presents Nigeria with another rare opportunity to recalibrate the Economy, therefore the need for a focused, strong and purposeful leadership has never been more imperative, but sadly, President Buhari is yet to offer that sound and effective leadership.
In this time of uncertainty and significant job losses, Buhari cannot choose to carry on like all is well, the President must immediately initiate a fiscal plan and legislative agenda that will help to protect businesses and save jobs.
It is my hope, that after the present storm, Nigeria will rise and shine!
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