Urgent need for strong economic team
These are indeed critical times for the Nigerian economy. Low oil sales have adversely affected government revenues, inflation figures for July are at 17.1 percent, unemployment rate is at 13.3 percent, up from 12.1 percent in March, and the naira continues to plunge, exchanging at 420 to the dollar at the parallel market.
Furthermore, the nation’s external reserves have fallen by 2.86 percent to $25.45 billion as at late August, Foreign Direct Investment (FDI) inflow has plunged 56 percent, to $175 million in the first quarter of 2016 compared with $395 million in first quarter of 2015, and nominal GDP growth in the manufacturing sector in the second quarter of 2016 is at -1.02 percent (year-on-year), 1.09 percent points lower than the 0.07 percent recorded in the corresponding period of 2015, according to data from the NBS.
The Federal Government last week officially admitted that the economy has slid into recession after negative growth from early part of this year. With these negative indices, Kemi Adeosun, Minister of Finance, acknowledged recently that Nigeria was in its worst possible time. One of the effects of this has shown in over 272 businesses in Nigeria closing shop, out of which 222 are in the SME category while about 50 are big manufacturing companies, according to Manufacturers Association of Nigeria (MAN).
Obviously, what the foregoing picture strongly indicates is the need for urgent pragmatic action and readiness for hard work to bring back the economy on track. Unfortunately, the Buhari government spent more than a year trading blames on who damaged the economy which it promised Nigerians it was coming to repair. Within this period, the government failed to show Nigerians and the business community its economic direction and blueprint. This automatically led to erosion of investor confidence and fall in profit margins.
The kind of reforms Nigerians were expecting to see at the beginning of the administration was not seen and the result today is the heavy toll it is taking on the economy. Perhaps the problem would not have been as much as Nigerians are experiencing if there were early policy responses and the right communication.
It is now expected that Buhari government should brush blames aside, overlook political ‘settlement’ appointees and ensure that strategic thinkers and a proactive economic team from the public and private sectors are brought on board to bring about appropriate and timely economic and fiscal policies to turn the economy around.
Sam Ohuabunwa, a former chairman of the Nigeria Economic Summit Group (NESG), had recently identified lack of thinking and patriotic commitment of Nigerian leaders as the cause of the current economic crisis facing the country. Jibril Munzali, president of Nigerian Institute of Management (NIM), while acknowledging President Buhari’s efforts in dealing with corruption, however, said this government’s weak link is the management of the economy.
“Added to that there is no chief economic adviser or a strong economic management team led by an economist. Government can increase the size of the cabinet and bring technocrats to manage the economy. Inasmuch as government is fighting corruption, it should equally have economic team to manage the economy,” Munzali said.
We agree. In an economic recession as the nation is today, what the country needs are technocrats at strategic positions and those with proven track record of integrity and competence who are not politicians. After 16 months in office, having initially appointed politicians in various positions and with current economic realities, President Buhari needs to consider overhauling his cabinet or enlarging it by appointing strong economic team to tackle the economic challenges staring the nation in the face.
In addition, the government should ensure effective communication of its programmes, where there is any, which would also ensure buy-in by various stakeholders and show direction of the government.