Edu Etukakpan
Edu Etukakpan|14 September 2016
It is no longer news that Nigeria, economic wise, is facing a very serious crisis, which economist termed- Recession. Recession, according to economictimes.com, is defined thus: "a slowdown or a massive
contraction in economic activities." A significant fall in spending generally leads to a recession. Such a slowdown in economic activities may last for some quarters thereby completely hampering the growth of an economy. In such a situation, economic indicators such as GDP, corporate profits, employments, etc., decline. This creates a mess in the entire economy.
To tackle the menace, economies generally react by loosening their monetary policies by infusing more money into the system, i.e., by increasing the money supply. This is done by reducing the interest rates. Increased spending by the government and decreased taxation are also considered good answers for this problem, which is what many quarters are calling on President Buhari, to do. Similarly, economist.com, defines it as "a period of slow or negative economic GROWTH, usually accompanied by rising UNEMPLOYMENT." With the definitions above, coupled with the recent figures released by Nigeria Bureau of Statistics, (NBS), in which the country’s GDP fell by 0.4% in the first quarter of 2016, and 2.06% in the second quarter of 2016, respectively, it is no, gain saying the fact that the country's economy is officially in recession.
The economic crisis, in which Nigeria is facing today, emanated from two canker worms, of Corruption- material and immaterial, and Negligence. Before I continue, let me explain what I mean by material and immaterial corruption. Material corruption has to do with possession of physical things, or assets, such as houses, cars, clothes, wrist watch, and/cash asset, etc, while immaterial has to do with insincerity, immorality, lust, etc, with immaterial being the very root of the material. From the above, we can simply deduce that, the economic crisis confronting Nigeria today, did not just spring up over night, it is a process, with signals, but due to corruption of past administrations, without pointing any accusing finger, or blame game, and also, due to negligence of past administrations. I thus, intend to confine my writing to these two issues as raised.
One of the factors contributing to recession which we are facing now, as already stated, is the aftermath of corruption, and official fraud of bogus political office holders salaries, bogus amount for contracts, which are/may never be completed, irrational medicare bills for public office holders, extravagant travel allowance for public office holders, whatever you could think of. When political, and other high ranking public office holders, who represent just 35-40% of the nation's population, corner 50% of the nation's treasury, how can the remaining 50% be used to better the lots of 65-60% of the masses? How possible, is it that the remaining 50% can fund so many developmental projects, to be done?
In Nigeria, it is a norm that senators, federal and state house members, should use official cars worth 15m Naira, or even 20m Naira, to show how rich the country is, or to show the high 'profility' of the office. It is also a norm in Nigeria for a president of the Senate, to burn spoiled monies, which have over the years been stock-piled in his private residence, without investing such money, even though it is ill-gotten. It is also normal, for a Senate President to keep up to 110m Naira in his private residence, and 310m Naira, without investing; they prefer buying overseas, yet, we complain of recession. Why won't we experience recession, when public holders prefer spending holidays in Spain, Indonesia, UK, outside of medical care?
Recession, is inevitable when small scale production is not encouraged, when we do not buy local foods, and when we prefer selling off the small ones produced, when it is not enough for domestic consumption. This is the height of insincerity, as practiced by Nigerians! How could we escape recession when money was borrowed to pay salaries, six months to May 29th, 2015; how possible could we escape recession when money meant for arms purchase was diverted, and shared among the 'high and mighties'? How possible was it, that we could escape the snare of the hardship we are facing now, when the NNPC failed to account for $45b? And also $20b, still petroleum money when this monies would have been invested in industrializing the country?
It is saddening, that even before Yar'Adua/Jonathan's regime, the refineries had stopped functioning; cottage industries were not constructed to boost local production; this, we can attribute to corruption, and insincerity. We could not have escaped recession, when we produce inferior quality products, all in the name to make fast money, which makes many to look outside to get the same goods; when we used 500 Naira, to produce a good worth to be used 1,500 Naira, then we expect to get the same output! No, it does not happen that way; when these things happen, buyers now prefer buying outside, to buying local made goods. This is the immaterial part of corruption.
Recession is inevitable in a country that prefers to sell off the few quantity produced, to others, and prefer to buy it back, sometimes, as processed goods, it is absurd, and insincere attitude. That is why I conceive the "Change Begins With Me" campaign of the present federal government to mean that we refrain from our old ways, and imbibe a positive attitude towards production, and all other spheres of life. Again, the economy suffers the current blow today, due to negligence of the non-crude oil sector of the economy. Even though this point, by implication has been addressed already, it is germane to state clearly that the past administrations, by act of negligence and insensitivity to future economic reality, coupled with selfishness, neglected, and abandoned the few manufacturing industries we had, to die, because of oil proceeds. Today, oil price has fallen globally, nations that depends on oil can no longer fund capital projects, and Nigeria is having her fair share of the global fall.
However, as daunting as this may seem, we can negotiate our way out of the present predicament. One, and a major way of achieving this, is to redefine our attitude; and also turn the problems to solution. This article, has implicitly, identified two important factors, which are 'corruption and negligence'. We must look and think outside the confines of oil, which is the main stay of our economy, and attend to other sectors which can still generate foreign exchange, to boost our foreign exchange earnings, and create more employment opportunities. The previous governments has dealt enough with our economy, by their acts of insensitivity to the future, backward thinking, negligence and official fraud of all kinds, the economic reality now, nay, recession, is an opportunity to spread our tentacles to other sectors of the economy, by moving from a mono-economy, to a diversified economy; and put our resources together for a better tomorrow.
(For more on the other strand of the problem- Negligence, and how to restore the economy, watch out for my next article still on this platform)
Comr. Edu Etukakpan
Media Consultant/Socio-Political Commentator
Writing from Ikot Abasi
