THERE is a saying that it amounts to a height of naivety to be doing the same thing fruitlessly while expecting different outcomes. To say that Nigerian economy is inexorably heading back to recession it exited in 2016 is merely saying the obvious.
In federal arrangements the world over, the entire governance structures and sectors are diversified which enables constituent units to be semi- autonomous to ensure maximum exploitation of natural and mineral resources in the country. The APC-led federal government led Nigerians up the garden path to believe that diversification of the economy are only through agriculture and solid minerals sectors.
The fact remains that the economy has not registered appreciable and phenomenal growth to create wealth and lessen the bourgeoning and spiraling unemployment that predispose the youth to restiveness and anti social proclivities. The federal government’s mindless resort to foreign loans which the Obasanjo administration had substantially reduced has predisposed the country to generational debt overhang. In other words, future generations of Nigerians’ future have been unconscionably mortgaged due to failure to adhere to proper governance parameter.
Denouncing the deception on diversification of the economy and resort to foreign loans, Daily Sun editorial quoting the International Monetary Fund’s [IMF] report said: “The International Monetary Fund [IMF] in its 2020 outlook downgraded its growth forecast for the Nigerian economy to two per cent as against its initial projected growth of 2.5 per cent.
The bleak forecast, contained in its Article IV Consultation to Nigeria, came on the heels of plunging oil price in the international market fueled by the outbreak of the deadly Coronavirus in China. The IMF team of economists that visited Nigeria to assess the economic and financial policies described the outlook as very challenging and additional shock to the economy.
“The pace of economic recovery remains abysmally slow, as declining real incomes and weak investments continue to weigh on economic activities. The external vulnerabilities are increasing, reflecting a higher deficit and declining reserves that remain highly vulnerable to capital inflow reversal. Nigeria’s external reserves have fallen to N37.23 billion as at February 13, 2020, while the inflation rate has risen to 12.13 per cent for the month of January”.
The Economic Advisory Council headed by Professor Doyin Salami agreed with IMF that the economic growth is painfully slow “due to much dependent on oil thus making it vulnerable to external shocks whenever oil prices plummet or driven by unforeseen circumstances such as the current coronavirus outbreak”.
Concluding, the editorial said: “We enjoin the government to put more effort in its diversification drive and address other factors that undermine economic recovery. We say this because the nation cannot afford another economic recession. We believe that non-oil revenue mobilization is paramount in overcoming the financial constraints and ensuring that interest payment to revenue ration is sustainable. There is no doubt that the economy requires structural reforms in critical sectors”.
The admonition of the IMF and the head of Economic Advisory Council never verged on the necessity for foreign loans to revive the economy. The emphasis was on reinventing the classical principles of federalism which goes with complete diversification of the wobbling economy.
It was a sad commentary that the Senate, in spite of public outcry, has obliged President Buhari’s new request for foreign loan to the tune of $22.79 billion from the World Bank. As things turned the deluge of criticisms of the loan and the fallouts of the coronavirus pandemic has led to dropping of the loan.
The director general of Nigerian Employers’ Consultative Association [NECA], Dr. Timothy Olawale decried the insatiable and unquenchable appetite for foreign loans by the federal government which as at February, hovers around 38 billion US Dollars. He said: “The employers association received the news of $22.79 billion foreign loan with concern. This is not only worrisome, but also alarming. The growing debt stock with huge percentage of the budgets over the last decade going into debt servicing needs to be stopped. Borrowing can be permissive given the state of the economy, but not to the clearly humongous level it has turned out to be. Government cannot continue to mortgage the future of the citizens through unsustainable borrowing. It is expected that with the recent efforts at recovering looted funds stashed at home and abroad, government would have alternative sources of funds to meet its developmental objectives”.
On its part, the Nigerian Economic Summit Group [NESG] in its 25th Nigerian Economic Summit Report contended as follows: “The federal government should stop borrowing as the nation’s rising debts is unsustainable. The unsustainable circle of rising debts and declining revenue will have consequences on the country’s macroeconomic stability and crowd out private investments.
“A stable macroeconomic environment is necessary for sustainable economic development. For Nigeria, emphasis must be placed on achieving consistent high GDP growth rates as well as attaining quality growth which must encompass major sectors of the economy”.
A veteran journalist and columnist, Prince Tony Momoh, stressing the imperative of restructuring the quasi federation said: “Here we are, for a federation that is manageable, we must decongest the political space, and when we have done this, economic deregulation is automatic”. A noted columnist, Ropo Sekoni contended that “Diversification answers just one side of the problem; freeing sub-national governments from the strictures of centralism can bring economic diversification to success much faster than our leaders think…Diversification policy without political decentralization is bound to continue to slow down diversification of projects”.
Public affairs analysts contended that the implementation of development plans like “Vision 2020” to frontally address the underlying contradictions in the economy and governance which gnaw at the overall growth and development of the Nigerian economy was not properly monitored due to insincerity and primordial sentiment that has gnawed at the meaningful development of the country.
Vision 2020’s two glowing broad objectives were to “make efficient use of human resources to achieve economic growth and to translate the economic growth into equitable social development for citizens, deepening reforms at all levels of government, promote private sector-led non-oil growth to build the foundation of economic diversification, invest in human capital development to enhance national competitiveness, upgrade the capability of the internal security apparatus of government and through that, enhance the efficiency of their operations”, were not faithfully adhered to.
Even the supposed diversification in the agricultural sector has turned out to be a ruse as Islamic terrorists masquerading as herdsmen carry AK-47 guns to kills farmers and disposes them of the ancestral lands while the police pretend to be helpless in arresting and prosecuting them. This scenario has made nonsense of the fraudulent policy of diversification of the comatose economy.
In summary, diversification should go the whole hog and not the ostrich posturing of diversifying only the agricultural and solid minerals sectors which remain a minute percentage of the entire resources in the country waiting to be explored and exploited for the much needed wealth creation, employment and poverty alleviation.