Way out of Nigerian Recession by Peter Agba Kalu.

Discussion in 'General Forum' started by Izu, Sep 2, 2016.

  1. Izu

    Izu Admin Staff Member

    Nigeria is in recession! That's not the news. The news is about some of the ways out some of our economic and financial experts are proposing that seems and sounds perfect. But, to me, on a deep reflect, raises lots of puzzle.
    When a world recognized economic guru like Chukwuma Soludo recommends a N16 or N17 trillion spending to enable us reactivate our economy out of recession, I think he's right and wrong at the same time.
    He's right because in a normal economic system like US, UK, German, etc such high level spending will help in the social, commercial, economic growth and development of the system. But Nigeria is a special case were certain seen and unseen economic indices must be put into considerations before such high drift spending must work.
    Throwing money, more and more and more money to the Nigerian economy is not the way out. If you doubt me, throwback to the rescue funds running into billions that this government at the early stage sunk into rescuing the states. Now tell me, how was it absorbed? And, what positive impact did it make to the system.
    Such spending was supposed to engineer spending drift within the states through the Civil Servants packed liabilities. But, it wasn't the case. Rather, the usual happened. Majority of the funds was absorbed by the new and very few political elites who rushed to change it into dollars. Their actions piled pressure on the then weak naira and her glory came crashing down and down the streets Ikeja, Sokoto, Calabar and Wuse. Believe me, another spending at the level Soludo recommended is not going to be different. Unless, within that proposal, Soludo is calling for economic emergency power for Buhari. If so, it's not an entire bad call if limited to certain areas, but surpassing the states within the state. I will explain later.

    In an economy that runs 30% capital and 70% current spending, there's no way you can spend your way out of recession without an emergency power to the President. That's just the simple truth. The systems to a large extend is already programmed to absorb any fund that is coming from government no matter how hard you try to channel it.
    If you share the funds among the states, it will end up in factious projects and contracts. We should not forget too soon how the trillions of oil windfall that was shared among the states ended up in private accounts and properties in Dubai, Europe and America. Another huge fund given to politicians is not going to be different.
    If Nigeria is an economy powered by commerce and manufacturing then it will be understanding. But Nigeria is not. The greater part of our GDP growth dependence is powered by our dependence on oil export. Just look at the percentage of our IGR in our budget and percentage of oil revenue and get my drift.
    There's just no enough economic activities in the federal and except Lagos, then, within the states that can help sustain the states through IGR. So pumping such high level spending without a collaboration of activities will worsen the recession. Because, it just means two things: constant minting of the naira limitlessly or excessive borrowing since the economy mechanism to generate such level of fund isn't in place. Either is evil towards reviving our economy. We can't keep on borrowing to the detriment of our children.
    Moreover, Nigeria as a nation is being run as more of Royalty not as an economic development entity. Most of our citizens don't pay taxes and those that do, their taxes don't reflect the level of economic activities going on within them. Our leaders do not even see dodging of taxes as major economic crime. So, where, how and exactly when the economic activities that will absorb this high level spending and help us spend our way out of recession is coming is exactly what I am trying to pinpoint.

    Any of the funds you channel through any of the government agencies will as usual, end up in the pocket of the politicians. When you look at what has been going at government agencies like NNDC and other parastals you will understand my drift. Majority of the contracts goes to the members of the Senators and Federal House Members through proxy. All the legislators meant to constitutionally do oversight functions on the agencies are their main contractors. They collect the funds and do poor work or atimes, abandon the work outrightly.
    Worst of all, if you budget such high level spending and allow it to go through the National Assembly for approval, they will pad their own trillions into the budget because their greed is beyond human comprehension.( Now, this last assertion is influenced by revelations and confessions coming out of members of the Nigeria National Assembly)
    In conclusion, the only way to make the Soludo recommended N17 trillion spending out of recession is to give Buhari an economic emergency power. And, am not sure that is what he's recommending.
    Being sincere, Buhari needs such economic emergency power to do an emergency economic surgery within our system radically now. But, our fears and reasons for kicking against it by even majority of those that voted for him is his failure to keep faith and promises.
    Buhari came with such high level hope but betrayed trust as reflected in his lopsided appointments, stubborn arrogance which I think is natural to him and betray of his old military days dictatorial tendencies. As result, there's justifiable fears in his request for economic emergency powers because we are rightly afraid that it might be a step towards requesting for another emergency power or perhaps, muscling the economy of any opposition state. Especially, going by how intolerant he and APC in the larger picture, has been of PDP.
    Again, this regime has not done or take actions to convince us that they are putting in place so many elementary economic development plans outside fighting for corruption this or that. Some of their economic policies that needs to be reviewed are what brought us to our knees. So, still carrying these economic policies and in it, makeing a request for economic emergency powers is to say the least, not only suspicious. But, outrightly fearful. To me it boils down to two things: it's either Buhari does not have good advisers or he's not listening to them. Whichever case, the fault is still his because the buck stops at his table.
    If not, Buhari in all sincerity needs economic emergency powers to surpass the states and pay the various states civil servants, contractors etc, surpass the pad loving legislators and pay some contractors to mobilize to site and starts work to help urgently reactivate economic growth. He needs economic emergency powers to do so many things that going through the normal procedure will hinder.
    But, in not separating the state from party and the highly respected office of the President from the person of the President during the Jonathan era, APC supporters and leaders and Buharist destroyed the sense of being a nation with a simple goal as the end result.

    That's why now that even if it's to our benefits, political colouration are read into issues no matter how sincere. How could APC and Buharist had responded if Jonathan had made similar request? Maybe in different area. That's the question some PDP apologist are asking.
    In all sincerity, Soludo's solution is the way out. But, not with the way our country is presently being governed. For it to work, Buhari needs economic emergency power, but we just don't trust him enough to give it to him.
    Besides, there's no economic team in place and economic master plan about how to spend extra money for our development.
    If over N6 trillion budget could not make an impact believe me, N16/17 trillion won't.
    It's not about the money but ideas, master plan and the real change, which is changing the political system paired towards consuming 70% of our expenditure.
    We are all feeling the effects of the economic hearse-ship. We need constructive criticisms and solutions now. Soludo has taken the lead. Another idea please.
    Daniel Obinna likes this.

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