How Nigeria can survive economic recession

July 27, 2016

Ifeanyi Onuba, Abuja

The Centre for Social Justice on Wednesday listed some of the actions that could be taken by the Federal Government to steer the economy out of the looming recession and reposition it to the path of growth.

A recession is defined as a significant decline in activities across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale retail trade.

The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s Gross Domestic Product.

Nigeria’s GDP growth contracted to -0.36 per cent in the first quarter of this year compared to 2.11 per cent in the fourth quarter of 2015.

Nigeria’s economy has been badly hit with unemployment rate high at 12.1 per cent; exports dipped by 34.6 per cent while imports declined by 7.8 per cent in the first quarter of 2016.

The headline inflation index for the month of June 2016 was put at 16.5 per cent which is the highest in 11 years.

But the group said while the economy is currently battling the negative impact of fall in oil and commodity prices as well as low receipts from non-oil sources, a starting point for the Federal Government is to draw up a National Economic Framework to fill the policy void.

This, it added, must be concluded in the next few months.

In the recommendation of the group, which was made available to our correspondent by the Lead Director, CSJ, Barrister Eze Onyekpere, it said that monetary and fiscal policies should also be harmonised to achieve macroeconomic stability and economic growth.

In doing this, it said that the 2016 budget should be fully implemented while special intervention funds should be set up by law detailing the criteria for entitlement and measurable indicators of success.

The group also said tariff and non tariff measures should be used to encourage local production, noting that there should be full implementation of the automobile policy to encourage local production of vehicles whilst the Export Expansion Grant should be reinstated.

It also called on the government to use domestic preferences in public procurement to create jobs and adding that this is the time to fully implement the Buy Made-in-Nigeria policy.

The expansion of local content beyond the petroleum industry to create jobs and increase the retention capacity of the economy according to the group should be pursued as an antidote to capital flight.

Commenting further on the recommendations, Onyekpere said this is the time for the government to implement coherent policies that would cut across all the sectors of the economy and integrate activities into a programme of action with necessary linkages in education, agriculture and manufacturing.

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