The Chief Consultant Biodun Adedipe
Associate Limited, Dr. Biodun Adedipe has advised the federal government
to develop policies that would help tackle all forms of unemployment in
the country.
Adedipe said this while presenting a
paper titled: “The Impact of Economic Recession on the Nigerian Banking
System,” at the ongoing workshop for financial journalists organised by
the Nigeria Deposit Insurance Corporation (NDIC) in Kaduna State.
The economist stressed that major
challenges facing the nation presently are unemployment and
underemployment, which in economics is called disguised unemployment.
“Among 24 to 45 youths in the labour
force, about 45 per cent of them is unemployed, and that is where the
real issue is in dealing with recession. Unemployment has to be tackled
to lead the economy out of recession. The challenge is that we have a
weak production base in this country and that is also a challenge to
this economy.
” In Nigeria, we consume what we don’t produce and produce what we don’t consume.
For instance, most of the agric produce,
we generate from the farms and then export without adding any value. The
value of the cocoa we sell to the rest of the world is by far so little
compared with what we spend on chocolate and other derivatives of cocoa
that we import. In this case, we send the raw materials out, but we
import finished goods,” he said.
According to Adedipe, if Nigeria is to
get out of recession, she must not follow all the World Bank and IMF
template, saying you have to sit back and look at what would work for
the economy.
“It is not just to take whatever the
World Bank and IMF tells us. I warned the government sometime not to
listen to World Bank and IMF that says it is only when the growth rate
is negative, that is when you fall into recession. What we learnt about
business cycle is that it is in four phases.
“You have boom, recession, which means
the economy is going down. It doesn’t talk about negative growth, which
means we should have been more worried and concerned in dealing with the
downslide rather than wait until we enter negative growth. Of course,
if you don’t deal with that, you enter a slump. But a recession is not
all bleak. If it has a message that eludes most people, it is that after
recession, recovery would definitely follow. What matters is what you
do, rather than what you are going through in recession,” he added.
Furthermore, the economist expressed
optimism that the economy is already on the path of recovery, just as he
urged government to show leadership by ensuring that it increases its
spending
Adedipe, described the proposed budget
for 2017 as “good direction in terms of volume, good direction in terms
of structure and of course, good direction in terms of emphasis. So, the
important thing is to encourage the government to continue in that
direction in terms of sectors to focus on, and then putting emphasis on
capital expenditure.”
On his part, the Director of Special
Insured Institution Department, NDIC, J.J. Etopidiok, said the regulator
has increased strategies to ensure the financial sector’s remains
strong.
Noting that the Microfinance/PMB segment
holds great potential for economic development, Etopidiok said that NDIC
has extended insurance cover for PMBs to N500,000 per depositor from
N200,000.
It has also instituted insurance cover
for agency banking, online, mobile money to the tune of N500,000, in
efforts to deepen payment system and institute confidence in alternative
payment channels.
From Obinna Chima and Nume Ekeghe in Kaduna/Thisdaylive
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