The task of sorting out the economic crisis is far from finished
Against the backdrop of the worsening economic situation in the country caused largely by the dwindling price of crude oil, a two-day retreat for governors of the 36 states of the federation and members of the National Economic Council (NEC) held last week at the Presidential Villa in Abuja. In his welcome address, President Muhammadu Buhari identified five key sectors which the country must focus on to revive the economy. Specifically, he said the challenges militating against development in agriculture, power, manufacturing, housing and health sectors must be squarely addressed to lift millions of Nigerians out of poverty.
The highlights of the meeting included agreements to make concerted and consistent efforts to diversify revenue sources; expand compliance on value added tax (VAT) by adopting a gradual plan for a rate increase; increase expenditure through borrowing, which should be invested in infrastructure; focus on fiscal responsibility as a critical element in macro-economic balance; develop financial inclusion strategies to cater for the poor and vulnerable population; and maintain a minimum level of capital expenditure of 30 per cent in the budget. These indeed are noble objectives.
Notwithstanding what the administration may say, there is a feeling that the retreat had more to do with politics than economics. The aim, to many observers, was merely to deflect the growing local and international criticism over the administration’s lack of economic direction by appearing to be doing something. The economy is shrinking. Poverty is rising. Inflation is headed north. Unemployment is worsening. And fuel queues are not only back with a vengeance, Nigerians are now told it would be with us for some time. All these are happening at a time the federal government has practically closed the limited open market leeway in the system with knee jerk controls and measures. If truth be told, insofar as the government allows these negatives to take centre stage in our daily lives, no retreat can change the present temper of discourse on the economy.
Even for those who may argue that a talk-shop is not necessarily a bad idea, the platform could be deemed questionable. First, the National Economic Council has no executive powers. It is merely a policy review collective designed to enable the federal government carry the state governments along on matters that concern the national economy. Second, the administration has almost spent one year in office. Third, it would seem that there is already a closure on some policy issues. For instance, what determines the economic behaviour and fortunes of Nigerians almost instantly is the exchange rate of the naira. It was not even on the agenda; neither did President Buhari mention it in his opening address at the occasion. The question therefore is: why not make the hard decisions that are required and leave the people to run their lives?
What this administration must know is that any attempt to embark on a counterfeit variant of centralised planning in the 21st century can only set the nation back by many decades. That is why we reiterate our call for the president to quickly put in place an economic team that will help in repositioning the country.