The economic state of the nation may not be as bleak as some Nigerians think because the government of the day is also interested in speeding up the recovery process and has put up measures in place to recover the economy. It will take experts to explain in very simple terms these measures for better understanding by the citizenry, Writes JOY ANIGBOGU.
The men’s fellowship of the Christian Pentecostal Mission (CPM), Pentecostal Action Team (PAT) has organized an economic recovery seminar in Lagos, with the theme, Trade-out Strategies in a Recovery Economy and the guest speaker is the erudite industrialist and former chairman of Nigeria Economic Summit Group, Mazi Sam Ohuabunwa. He talks about the remedies and other panacea that the government has set up to ensure that the economy gets back to shape.
The chairman of PAT, Mr. David Edochie talks about the economic recession, foreign exchange (forex) instability and the harsh economic condition under which most families operate.
“Nigerian economy is presently bedeviled under an economic recession, part of the problem is forex instability and chronic economic situation that is inimical to both human and business survival and this is evident in the drop in Gross Domestic Product (GDP) since last year.
“The recession brought in low productivity in output in real terms, unexplained high inflation rate and uncontrollable unemployment, a shrink in real value of disposable income and a near collapse of industrialization and a clear reduction in balance of trade” He said.
Mazi Ohuabunwa went down memory lane when he talked about the history of recession and explained the various measures that have been put in place to give succour to the people.
“Our economy began to contract from the middle of 2014 when oil price fell from a height of 115 dollars per barrel to the point of 25 dollars per barrel last year. That was what precipitated our challenge in the economy and because Nigeria depends on petrol to earn dollars and since oil gives Nigeria about 98 percent of forex, recession set in. It is important to also note that oil contributes only about 10 percent to our GDP and we run an economy that is essentially dollar denominated, so we have problems on her hands coupled with the problem in Niger delta area. We also import so much from outside and most of the imported goods are what we use to drive the economy. There are two major ways to bring dollars into the country by Nigeria. One is by the sale of crude oil and the other is by capital importation which has many dimensions, which include foreign direct investment, portfolio investment etcetera.
“The Central Bank of Nigeria (CBN) in trying to preserve the scarce dollars took a simple strategy by closing the doors to dollars going out and when you close the doors for dollars going out, you also close the doors for it to come in, and so we saw the naira depreciated from 197 naira per dollar to about 520 naira per dollar. Inflation rate rose to about 19 percent in 2016. The year 2016 ended with a negative GDP of -1.55 percent for the first time in 27 years”
Enumerating the measures put in place by government to control the recession, he said “In 2017 government responded and came up with measures to work back the economy into productivity. They opened windows for forex. They made sure small and medium enterprises (SME) can get forex without much documentation. Opened windows for business travel allowance (BTA), bureau de change, interbank etcetera. . The government did a second thing.