Nigeria Economic Summit Opened Yesterday With Experts Lampooning President Muhammadu Buhari’s Economic Policies And Asking Him To Act Fast If He Must Pull The Country From Recession
Economic experts yesterday warned that Nigeria’s economy was heading for recession as they scored the current administration low on all economic indices, urging the federal government to do something urgently to address the challenges.
At the day one of the ongoing 21st Nigerian Economic Summit in Abuja, experts who spoke on the first day of the summit attended by Vice President Yemi Osinbajo, who represented President Muhammadu Buhari, listed areas for immediate attention if the country must come out of current challenges.
The challenges notwithstanding, Vice President Osinbajo assure that the current administration is mindful of the challenge and is prepared to muster the necessary political will to deal with them, head on.
Speaking on the theme “Tough Choices: Achieving Competitiveness, Inclusive Growth and Sustainability” the experts said the high rate of youth unemployment which has risen up to 33 percent in parts of the country, the over 130 million Nigerians living below poverty line and the less than 10 per cent
rating of Nigeria in global development indices, coupled with dwindling oil revenue, as well as foreign exchange crises call for urgent Programme to reverse the trend.
In his welcome address titled “Setting the Agenda” Chairman, Nigerian Economic Summit Group (NESG), Mr. Kyari Bukar, noted that Nigeria, despite being the largest economy in Africa, with a Gross Domestic Product (GDP) of $536 billion, still lags behind in terms of global competitiveness.
According to him, “the latest World Economic Forums (WEF) 2014-2015 Global Competitiveness Report (GCR), has ranked Nigeria 127th out of 144 countries” thus falling 7 below its ranking, within the first few months of the life span of the current administration.
“In addition, despite being a frontier economy with significant prospects, we continue to trend downward on measures of relative competitiveness. According to the World Economic Forum Global Competitiveness Report 2014 -2015: Nigeria continues its downward trend and falls by seven places to 127th this year (out of 144 countries)”, he added.
He also blamed the current situation on “weakened public finances as a result of lower oil exports; weak institutions (129th) with insufficiently protected property rights, high corruption, and undue influence; dire security situation (139th), weak infrastructure (134th) and poor outcomes in health and primary education (143rd).
“The report however notes that Nigeria benefits from its relatively large market size (33rd) with potential for significant economies of scale; a relatively large and efficient labour market (40th) driven by its flexibility (20th); and a solid financial market (67th) following its gradual recovery from the 2009 crisis’.
Also speaking on what he called “The State of Nigerian Economy” Dr. Temitope Oshi- koya, former Chief Economist at the African Development Bank, AFDB, said Nigerian econo0my has grown at the rate of 2.35 per cent as against 6.25 per cent in the same period of September, 2014.
He noted further that whereas, the manufacturing sector grew at 16.0 per cent in 2014, it has plummeted to -3.82 per cent, while inflationary rate has increased from 8.2 per cent, in 2014, to 9.3 per cent, even as unemployment rate has increased from 6.4 per cent in 2014 to 8.2 per cent in 2015.
Oshikoya stated that unless something was done to improve on the none oil revenue, there was danger ahead as even the funds available for sharing between the three tiers of governments, including federal, states and local governments has fallen from the over N604B in 2014 to less than N485B in 2015 and may likely continue on the downward declines.
Partner/Head, Advisory Services, at the KPMG Professional Services, Mr. Kunle Elebute, called for gradual reduction in the current leakages, which will include, reduction of government spending on petroleum subsidy, increase in capital expenditure and increase in taxation from the current 6 per cent to 13.93 per cent, as part of the “tough choices” which the government must implement.
But Vice President Yemi Osinbajo assured that despite the challenges, government is prepared to muster every political will necessary to return the economy to the right path.
He said the task before the current leadership of the Federal Government was to clean up the mess that corruption has brought on the nation and rebuild institutions that had been ravaged.
Vice President Osinbajo said Nigeria is in a time of monumental challenges.
“We are at a time of monumental challenges and tough choices, but also a time of incredible opportunities for achieving competitiveness, inclusive growth and sustainability”, he said.
Continuing, he said “we, as a government, are called upon to make tough choices in exchange control restrictions, altering the absurd recurrent to capital expenditure ratio, reducing the deficit and reducing the overall size of governance. We are called upon to clean up the mess and rebuild the institutions that corruption has ravaged over the years”, the President submitted.
He also disclosed that the administration would be built on an economic model which would involve substantial
social investment over the next three years.
“We are compelled to redress the paradox of high growth figures and widening inequality, rising unemployment and poverty. It is evident that any economic model that leaves nearly half of the citizenry behind requires rethinking”, he said adding “this is why our economic model would involve substantial social investments over the next three years”.
Speaking during the Presidential Policy Dialogue, the Vice President expressed the conviction that with programmes such as the Conditional Cash Transfer and renewed support for MSMEs, government would generate employment, address poverty with the hope that these laudable initiatives
will greatly reduce social tension and criminality across the country.
Osinbajo fielded questions during the Presidential Policy Dialogue on “Tackling Corruption, Insecurity and Economic Competitiveness”, explaining that social investment had become imperative if government must impact the lives of the people as against what happened in the past where economic growth figures do not correlate to the lives of the vast majority of citizens.
On the agenda of the Buhari administration for tackling corruption, Prof. Osinbajo opined that exemplary leadership is fundamental to any meaningful fight against corruption, noting that mere lip service to the war against corruption had not yielded any positive results so far.
– Tony Ailemen, Abuja