JONATHAN'S PLEDGE ON THE ECONOMY
During his recent official visit to Kwara State, President Goodluck Jonathan promised to revamp the economy, widely believed to be in a comatose state, as quickly as possible. Perhaps as a hint to the direction that his incoming administration would go, the president said his new economic plan would collaborate with the Private Public Partnership (PPP) initiative in resuscitating the economy.
His administration, he noted, acknowledges the vital role that the private initiative could bring, especially in terms of valuable expertise and experience.
In that regard, he disclosed plans to convene a stakeholders' meeting comprising captains of industry and leading businessmen to chart a way forward for economic recovery.
The president acknowledged the importance of a stable and conducive economic environment for any meaningful economic recovery that can rekindle investors confidence, while job creation will be a mirage in the absence of a solid economic blueprint. Well spoken. Jonathan's promise on the economy is much appreciated. In the past two years at least, the state of the economy has generated controversies and government had in some instances denied that the economy was in bad shape.
The truth remains that no meaningful political and socio-economic development can take place when the economy is not looking up. Only last year, the immediate past Governor of the (CBN) Prof. Chukwuma Soludo, warned of a sinking economy and possible worse scenario of a Structural Adjustment Programme (SAP) if no preemptive measures are put in place. He listed huge domestic and foreign debts and the decline in Foreign Direct Investment into Nigeria as warning signs that something urgent needed to be done. Unfortunately, he was called a 'prophet of doom'. Also, advice by the Manufacturers Association of Nigeria (MAN) which claimed the economy was under-performing and therefore needed quick attention, went unheeded.
We welcome the promise made by the president and urge him to make the economy a top priority in his new government. In this regard, the key target should be economic growth. The recovery can only start by doing the right things. Government's economic managers should design sound policy achievable within specific time frame with concrete results. Emphasis should be on capital projects, a shift from the present huge expenditure on recurrent expenses that bears no economic fruits.
The power sector should take top priority in the budgetary allocation to capital projects. The economy has remained sluggish because government has not revived the power sector which has for years become one painful national embarrassment and a bottomless pit into which trillions of naira had been sunk without any appreciable progress. The message is simple: Get the power sector right and other economic variables will pick up.
Many companies have been forced close down with the attendant job losses because of poor power generation in the country. As a result, the manufacturing sector which is the engine that propels the economy had been the hardest hit its contribution to the nation's Gross Domestic Product (GDP) is currently less than 8 percent. Without stable power, the manufacturing sector, which is the real sector, cannot operate more than 40 percent of its installed capacity.
To get things moving again, government should look into other problematic areas that are slowing the economy down. These include social and economic infrastructure such as transportation, both rail and road high interest rate regime that is discouraging borrowing. As a result and small scale industries are gravely hampered in their operations.
Altogether, this is no time for lip service. Government should be honest and keep to its promises. Our country is not lacking the necessary institutional mechanism to turn things around. What is lacking is the sincerity and political will to grow the economy.