By Princewill Ekwujuru & Jonah Nwokpoku
Director General of West African Institute for Financial and Economic Management, Professor Akpan Ekpo, has said that the prevailing economic situation in the country resulting from persistent decline in commodity prices has sent the Nigerian economy hovering on the brink of recession.
He stated this while speaking on a topic: ‘Steering Nigeria out of economic turbulence: Policy choices for Buhari’s administration’ at an inaugural lecture organised by Centre for Financial Journalism, in Lagos.
He said: “The government must be strategic if it wants to fast track Nigeria’s development. It is clear that the Nigerian economy is in distress. The economy is on a tip of a recession. While no economic blue print has been made available but based on the party’s manifesto, pronouncements by government as well as the draft 2016 budget, President Buhari has several policy choices both in the short and medium terms.”
He said those policy choices must focus on critical areas such as massive investment in hard infrastructure, employment generation, investment in housing construction, changing the structure of the economy and provision of social services.
Other key areas, according to the Economics professor, include: rebuilding the public school system, building strong institutions, growing the real sector and pursuing aggressive monetary and fiscal policies.
According to Ekpo, “Investment in power particularly would enhance growth and generate employment. It would result in the establishment of new micro and small scale industries as well as sustaining existing ones. The release of the funds for infrastructure in the 2016 budget would enhance liquidity in the system. Construction of both urban and rural roads; repairs of existing roads, construction of rural roads would generate jobs.
“Unemployment has reached a crisis situation hence government must formulate policies and strategies to address the problem. The 2016 budget estimates provide for the recruitment of 500, 000 teachers. The visible hand of government must recruit persons into all the security agencies such as the Police, Army, Navy, Air Force, Immigration, Customs, etc. The multiplier effect of government employment would grow the economy and then check the pending recession. The new workers would earn wages, pay taxes to the government and demand goods and services.
“The rebased GDP indicates the sluggish growth of the housing sub-sector. A revamped housing sector for all levels of income through the mortgage process would involve both skilled and unskilled labour.”
Speaking further, he said the country’s economic structure needs changing. According to him, “Though this is long term, the effort must begin immediately.
The economy despite the rebasing exercise still remains at the primary level of production. It is essential that agriculture be large scale and mechanised so that its contribution to GDP would be less than that of industries but still enough to feed the domestic economy. Government should create the right environment for the economy to industrialize. It is through industrialization that a modern knowledge-based economy can be built. The economy must be diversified away from oil. The oil sector needs to be linked to agriculture, chemical and pharmaceutical industries. The Nigerian market is large enough to absorb whatever is produced in the economy.”
On the provision of social services, he said: “The provision of running water, health services, sanitation, etc is nothing to write home about. The provision of basic social services even with user charges would go a long way in improving the living standard of Nigerians. (Also) rebuilding the public school system is crucial. It is only the public system that can produce the mass of literate Nigerians who would aspire to acquire various skills at the tertiary level. For now, the public school system at all levels has collapsed. No country grows faster than its manpower training institutions.
He further pointed out that the Buhari administration has two main policy options.
These include: Economic nationalism and fine-tuning the existing framework. Economic nationalism, he said: “Involves the need to strategically depend on domestic resources with selective engagement with the outside world which would result in some element of change. Fine-tuning the existing framework would maintain the status quo while economic nationalism would incorporate elements of a developmental state economic philosophy.”