THE MAN ALERT ON THE ECONOMY
The Manufacturers Association of Nigeria (MAN) recently raised an alarm on the sluggish pace of recovery of the economy.
In its First Quarterly Report released recently, the association said essential indicators show that the country's economic performance between January and March, this year, was far below average.
The association's report, which is contained in its Bulletin already before its highest decision-making organ, the National Executive Council, noted that the economic indicators are danger signals that the much-anticipated, full economic recovery is still far away, unless urgent steps are taken to actualize it.
The association listed factors responsible for the low performance of the economy. These include the late passage of the 2010 budget, the rising inflationary trend and government's inconsistent pronouncements on the full deregulation of the downstream petroleum sector, as well as the expansionary fiscal outlay of the current Federal Appropriation Act.
Besides, the report stated that last year's political uncertainty over the poor health and subsequent death of former president, Alhaji Umaru Yar'Adua, exacerbated the economic problems of the country. Indeed, MAN's report has been supported by the latest report released by the National Bureau of Statistics, which shows that Nigeria's yearly inflationary rate between January and March 2010 was 12.5 percent. This is in contrast to the 8.3 percent recorded within the same period, last year.
MAN has done well to raise this alert. The issues raised are not surprising. They are problems that should be of great concern to government and its policy makers. The statistics are, indeed, troubling. The indicators are, by all accounts, substantially at the heart of our economic gloom. Figures are hardly necessary to show that key sectors that should drive the economy are in dire straits.
For instance, the power sector remains a major concern. As long as it remains at the present abysmal level, economic prospects in the country will remain bleak. Worse still, Nigeria's quest to be in the league of the top 20 economies in the world will remain a mirage. There is, therefore, need for an urgent paradigm shift. There should a departure from our present status as a wealth consuming nation to a wealth creation economy.
Undeniably, the current harsh operating environment renders business extremely unattractive, unless a multi-sectoral strategy to revive the economy, especially the real sector, is adopted immediately. Statistics also show a continuing decline in the contribution of the manufacturing sector to our Gross Domestic Product (GDP), from about 10 percent in the 1980s, to its present all-time low of less than 3 percent. Industrial capacity utilisation has also dropped to a bottom level of 25 percent.
These problems cast serious doubts on government's promises. With politics at the centre stage now, efforts to revitalize the economy may be relegated to the background. The MAN First Quarterly Report is, however, late, coming out in the third quarter of the year. MAN should compile and release its reports on the economy much more earlier than it does, currently. The association should also suggest a concrete way forward by offering alternative solutions to our economic problems.
Overall, we advise government to urgently and decisively address critical infrastructural deficiencies, especially the power sector. Wealth creation, agriculture, land reform, transportation and employment should be tackled with the seriousness they deserve. These are all part of the agenda of this administration.
Until real action is taken, especially in areas which MAN has drawn attention to, our economy may remain on a cliff-hanger. This will have unpleasant consequences. Nigerians no long want work in progress. We need concrete, urgent action and glaring good results.