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Akpan Ekpo, a professor of Economics and director general of the West African Institute for Financial and Economic Management, is worried that the President Muhammadu Buhari administration does not seem to have a clear roadmap for the nation’s economy; he makes some suggestions
| By Anayo Ezugwu | Mar 28, 2016 @ 01:00 GMT |
WITH increasing uncertainty over the economic direction of the federal government, Akpan Ekpo, director general, West African Institute for Financial and Economic Management, WAIFEM, has warned that the Nigeria economy is sliding into recession. According to Ekpo all the relevant macroeconomic and social indices show that the Nigerian economy is in distress.
Delivering a paper at the inaugural lecture of the Centre for Financial Journalism in Lagos, on Thursday, March 17, the DG said the economy raised the alarm that the economy had climbed to a tip of a recession because the President Muhammadu Buhari led federal government seemed to lack economic blue-print.
“The high rates of unemployment combined with reduced output in two quarters of 2015 suggest an economy in sphere of stagflation a prelude to a recession. The global environment such as the slow growth in China and the sluggish recovery in Europe further worsens the situation. However, it must be noted that market capitalist economies are subject to periodic recession no matter how best they are managed. Consequently, if the global economy is in a recession, the Nigerian economy would experience same at least as a client,” he said.
Besides, Ekpo said though no economic blue-print had been made available but based on the All Progressives Congress, APC, manifesto, pronouncements by government as well as the draft 2016 budget, President Buhari has several policy choices both in short and medium terms. “This lecture contributes to the debate on what the policy choices are for the Buhari administration if the Nigerian economy is to avert a recession. The regime of President Buhari has been in office for almost 10 months and Nigerians are becoming restive not only on which direction the economy is moving but also on whether change is actually taking place. Most of the macroeconomic fundamentals of the previous administration have not changed particularly after 10 months of the new regime.
“Even the 2016 budget of President Buhari is surrounded with controversies. Oil prices have dropped sharply thus affecting government revenue. The decline in the foreign reserves and massive depreciation of the local currency has resulted in unorthodox monetary and exchange rate policies by the apex bank. Some of these issues have re-awakened stakeholders in the Nigerian project to debate the policy options for the Buhari administration. What is the economic blue-print of the Buhari administration?
“Can the Nigerian economy be structurally transformed within the four years? It is important to indicate that the global economic environment is not favourable. Growth has slowed in the advanced economies and Chinas economy is also experiencing slow growth. The downward trend of commodity prices suggests that countries like Nigeria must look for domestic resources to finance development,” he said.
However, the renowned economist blamed the Peoples Democratic Party, DPD, for the economic woes being faced by Nigerians currently. He said the 16 years rule of the PDP didn’t restructure the economy of the country, and that despite the economy growing by six percent it had failed to provide basic needs to millions of Nigerians and reduce the unemployment rate.
He argued: “After 16 years of neo-liberal economic policies of the PDP, the performance of the Nigerian economy was generally unsatisfactory. Despite selected episodes of marginal performance, the economy with growth rate averaging six percent was unable to provide basic needs to millions of Nigerians, the rate of unemployment rose beyond the benchmark of five percent. The real sector was almost dead, power supply remained epileptic, infrastructure was in sorry state, the public school systems at all levels had deteriorated. Yet this was a period characterised by huge revenue of government due to rising price of petroleum.
“The period was characterised by widening and growing inequality such that only 20 percent of Nigerians benefited from the resources of the economy. The structure of the economy did not change. The economy was at the primary stage of development with agriculture and mining dominating with heavy dependence on an exogenous source of revenue (oil) to finance development. Against this background, Nigerians voted into power President Buhari who assumed office on May 29, 2015.”
On the way forward, Ekpo said the 36 states must play their role in putting the Nigerian economy on the path of growth and development. He stated that states must also design strategies and programmes that would attract investors as well as generate employment. He suggested that the states should operate under competitive federalism so as to help the economy to grow and develop, adding that for now, the states dependence on the centre remained unhealthy.
“Sustained growth even if it is inclusive is only a necessary condition for development. Hence, it is best for our leadership, policy-makers and technocrats to search and work towards inclusive development within the context of a developmental state economic blue-print. Anything else would be a return to the status quo implying the continuation of the development of underdevelopment increase poverty, backwardness and misery,” Ekpo said.
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