Killing The Recession Before Depression Kill Us
It is very easy to throw blames around at the present leadership of President Muhammadu Buhari (PMB) over failure to saddle the ship of affairs of Nigeria to safe bankable waters. It is also easy to shift blames on the immediate past administration of President Goodluck Ebele Jonathan (GEJ) over alleged mal-administration, corruption and many others. Some direct their anger on account of poverty of knowledge some for useless political points. Viewpoint is however meaningless if we don't have meal ticket out of the present economic doldrums. The point is, governments including the present administration contributed immensely to the unsavory situation Nigeria finds itself economically. The immediate government may have good economic team, but excellent looters. The present administration may not have looters based on zero corruption mantra of PMB administration. They however have a team groping in the dark over poor understanding of affairs of governance
As I said earlier, it is not time to bandy blames around but to seek solutions. Recession is upon us, no gimmicks about that. It is neither a death sentence or is it a good development. Nigeria will not be the first country to hug the mystic hydra headed monster, but how we manage it will certainly define our state of affairs. If we choose to play the political tune, then we have decided to embrace with open arms the beast of hunger, which comes with all manner of strife and crimes. Macroeconomic theory defines economic recession as the contraction, or shrinking, of a country’s Gross Domestic Product (GDP). Once the GDP is depleted, it affects negatively, the value of all the goods and services produced in each year. The fall in production of goods and services affects purchasing power and subsequent downturn in business and general living condition of people. Sadly, recession is like doing time in prison. Unlike prison sentence, depression ignited by recession has no definite term. Those in economic prison can only plan for the long walk with depression where loss of job is eminent, hunger and starvation guaranteed, crime record high. It is however interesting to note that prices of goods and services will take a nosedive. Planning is indeed an imperative to survive the looming monster.
The global economic reality, which has led to oil glut, crash in dollars has made so many countries vulnerable to recession. It is imperative to recall that recession hit the world in the following years; in 1980-1982, 1990-1991, 2001-2003, 2007-2009. If Nigerians passed through most of the episodes of economic recession highlighted, then it was on account of a functional mono-economy sustained by an oil sector, which was once profitable.
Our dear economic analysts however failed to realize that oil fortunes may not last, hence policy makers never thought it was important to diversify economy. Curiously, the PMB led government was visited by several waves of devastating economic challenges. First the gory looted state of the economy, then the global crash in oil prices and the downward spiral of the naira against the dollar. The situation is indeed dire, efforts uphill.
Other silent but tempestuous challenge this administration managed to overlook is the lack of capacity in terms of manpower to manage or paddle our tottering economy from the brinks. Monies were locked up in Single Treasury Accounts (TSA), no other income generating sector order than the petroleum sector, no export trade, the geometric rise of the dollar against the naira and a public sector largely sustained by corrupt money. The economic situation was doomed to crumble under. The TSA is a good thing, but the timing for full implementation has posed a huge challenge of financing. Though we are practicing a centralized, decentralized TSA operations, the process would have been staggered in phases to mitigate against activities of Niger Delta Avengers who have forced oil production from 2 million to 800, 000 BPD. The TSA is good for economic planning/ accountability and a key driver of that account would have been the Government Integration Financial Management System (GIFMIS). The GIFMISS has long been operational as an application used for managing government financial process. Though the financial management system was not able to block leakages, the full implementation of TSA shut down the cash flow. Once there is no liquidity, the system grinds to a halt.
The Federal Government can reboot the system by injecting money into the system albeit wisely. With the zero tolerance against corruption in full swing, it is reassuring that the rate of misappropriation might reduce if money is injected into the system.
It wouldn't be a bad idea if the National Assembly is fabricated to a part-time legislative body. Moneys spent on sustaining the national assembly in the past 16 years is put at N1.6 trillion, a colossal amount to feed the private lifestyle of the red and green chamber politicians. Though the dynamic nature of governance might need legislation, but the imperative of cutting cost supersedes the filthy display of wealth by our legislators at the detriment of the country – a part-time will do for now.
Moneys for overheads have highly encumbered the system and overloaded the carrying capacity of the economy. Bogus spending's must end, reckless practices must be jettisoned. The hapless workers cannot afford to bear the weight of a crashed economy. The system has never given them respite when the economic situation was good. After the dust of recession settles, many millionaires will emerge from the sunken ship of some people who may have to bail themselves and families from the shackles of recession by selling assets at give away prices. The rich will soon become god while the poor doomed to become slaves.
Written by Israel A. Ebije
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@ israelebije.com