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.
However, while we commend Vice-President Yemi Osinbajo and the 36
governors for the initiative, there are several questions begging for
answers. Where are all the economic blueprints churned out by the
National Economic Summit Group (NESG) in the last 15 years? What
different outcomes are to be expected from the Aso Rock session? Of what
impact were the National Poverty Eradication Programme (NAPEP),
National Directorate of Employment (NDE), the Small and Medium Scale
Development Agency of Nigeria (SMEDAN), the industrial fund, etc? Given
that the money sunk into these agencies over the years is overwhelming,
what roles are they now expected to play under the current dispensation
where there is an emphasis on the poor?
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.
Thisday.......
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