Government is deploying a mixture of fiscal and monetary policies to bring out the economy from recession. However, a few are of the opinion that a rejig of the economic team by President Muhammadu Buhari is the only way out. Abdulwahab Isa reports
The nation is still firmly gripped by recession. That was the verdict by the National Bureau of Statistics (NBS), which in its last Gross Domestic Product (GDP) report for Q3, 2016 declared that Nigeria’s GDP contracted in the negative in third quarter of 2016 by -2.24 per cent (year-on- year) in real term.
With the latest contraction, the economy has posted negatives three times in a row. The figure was lower by 0.18 per cent points from growth recorded in the preceding quarter and also lower by 5.08 per cent points from growth recorded in the corresponding quarter of 2015.
The economy had decelerated by 0.36 per cent and 2.1 per cent in the first and second quarters of 2016 respectively. On quarter on quarter (unadjusted for seasonality), real GDP increased by 8.99 per cent. Many Nigerians have voiced out their disappointments with the composition of the current economic team.
They said the team as currently assembled lacks what it takes to lift the economy out of recession. The current economic challenges facing the nation pre-dates President Muhammadu Buhari’s administration. But in Buhari, Nigerians see a changed agent.
They trust his pedigree and reputation, which was why he was massively voted for. However, the biting economic woes leading to shutting down of firms, job losses, high cost of living have heightened fresh calls to rejig his economic team.
The current Economic Management Team was effectively put in place the day the Federal Executive Council (FEC) headed by the Vice- President, Prof. Yemi Osinbajo was constituted.
The team’s key members include Chief of Staff to the President, Alhaji Kyari, Deputy Chief of Staff, Ade Ipaye, Minister of Budget and National Planning, Senator Udoma Udo Udoma, Minister of Finance, Kemi Adeosun, Minister of State for Petroleum Resources, Ibe Kachikwu, Minister of Trade and Investment Okechukwu Enelamah, Governor of Central Bank of Nigeria, Godwin Emefiele, and the Director-General of the Debt Management Office (DMO), Dr. Abraham Nwankwo.
The Senior Special Assistant (Media and Publicity) to the Vice- President Mr. Laolu Akande, in one of his interviews, said that the composition of the team was not static as Minister of Agriculture, Audu Ogbe, and Information Minister, Lai Mohammed as well as relevant permanent secretaries have also been involved.
Laolu said the team had since been meeting and engaging representatives of the private sector, stressing that unlike what obtained in the past, Buhari’s administration did not make anybody from the private sector a member of the economic management team.
“The economic management is a government affair, unlike in the past when private sector individuals were made members of the economic management team.
What this administration is doing is to constantly engage representatives of the private sector,” he said. While the team is working assiduously to lift the economy from recession given the challenge of limited resources, lots of Nigerians are of the view that not much has been achieved in over 15 months of this administration.
They suggested rejig of the economic management team. However, some experts say nothing is wrong with the economic team as presently constituted, adding that the fruits of the work of economic team will manifest from 2017.
Calls for rejig
Amidst deepening slide in nation’s economic fortune, the rank of eminent Nigerians calling on Buhari to recompose the economic team and inject more capable hands has increased.
A chieftain of All Progress Congress (APC), Dr Hakeem Baba-Ahmed, recently advised the president to overhaul the existing institutional mechanisms to quickly ease the nation out of recession.
Baba-Ahmed, a retired federal permanent secretary, urged the president to tinker with his economic team to inject fresh ideas on how to quickly steer Nigeria out of its current economic problems.
He said government must apply urgency in tackling the recession, just as is being applied to tackle natural disasters. According to him, the level of response so far has not done justice to the magnitude of the problem.
“Nigerians all understand that a combination of past abuses and mismanagement of the economy and the collapse of crude prices and sabotage of oil and gas facilities have created a most challenging environment for the management of the economy.
“We will not join those who say President Buhari should stop reminding us of a past that is haunting us today We will insist that we hear daily what leaders did in the past, so that we can guard against letting people like them back to power. But we will join those who remind him daily that hunger is stalking millions of homes. Inflation is making life difficult by the day.”
A chieftain of Northern Elders Forum, Prof. Ango Abdullahi, was of the view that the current economic team must be tinkered with for positive result to be attained in economy.
He described the team in a recent interview as square pegs in round holes, and as such the team should not be expected to achieve positives. Bearing his mind to New Telegraph on need to recompose his economic team, Developmental Economist, Odilim Enwagbara agreed with the opinion. “I agree that it’s time the president reshuffled his cabinet.
This way, he can bring in the right people; people who understand how to grow the economy out of recession. He urgently has to do this because it is long overdue, or else, soon it can become a great depression.
The president should reach out to those who can help him fix the economy the same way Trump is reaching out to both his supporters and non-supporters,” he said.
In the face of calls for economic team rejig, experts have said that bold steps taken by the administration are in order. They are of the strong opinion that recession will pale into positive economic growth beginning from 2017.
Research analysts at Vetiva Capital Limited, an investment banking firm, had predicted that there could be a minor growth rebound to 1.97 per cent in Nigeria’s economy by 2017.
The analysts, in their report, urged the Federal Government to take seriously, its economic diversification agenda, which in the midst of the current disruption in the global oil market, will keep oil sector contribution to GDP low.
“Rising inflation and a struggling sub-Saharan economy continue to dampen business and investor confidence. 2016 will be remembered as a lost year from a fiscal perspective.
Nonetheless, we expect a modest recovery in 2017 with growth largely bolstered by public finance reform, infrastructure improvement and domestic capacity augmentation,” the analysts said.
Similarly, analysts at both Standard Chartered Bank and Moody’s last week predicted a bright economic outlook for 2017. They predicted that the nation’s economy would rebound from its current recession and record growth in 2017, despite the challenges posed by weaker oil earnings and foreign exchange.
Minister of Finance, Mrs. Kemi Adeosun, expressed similar hope last week, saying that manufacturing will get back on its feet. She spoke in Abuja after Federation Accounts Allocation Committee (FAAC) meeting.
“I am very confident about Nigeria’s progress. We are going through a very difficult time but we do have a strategy. We will get out of the situation that we are in because we have the right set of policies and we are sorting out the infrastructural challenges that are holding back the growth of jobs and the growth of businesses in Nigeria.
“There is no short cut to sorting out infrastructure. We need to continue doing what we are doing, sort out the issues in the Niger Delta to bring up revenue,” she said. She added that the manufacturing sector would get back with the implementation of measures being put in place by government.
“The rate of contraction is actually slowing, the rate at which economy is declining is actually slowing down and that for us is quite encouraging and we will continue to watch and look for areas where we need to provide more fiscal stimulus to get the growth back.
“It is clear from the figures NBS third quarter (GDP) that the manufacturing sector is the one that really very challenged and the numbers around that show that.
One of the challenges facing the manufacturing is forex. “But I think the major challenge for manufacturers is forex and high interest rates, and I know that the monetary authorities are doing everything they can.
We have a fiscal road map that we will be rolling out and it includes a number of measures around revenue mobilisation, tax relief and fiscal instruments that will be issued within 2017 to get the economy back into recovery,” Adeosun said.
The current economic woe is bequeathed to Muhammadu Buahari’s regime. However, Nigerians trust his capacity, pedigree for righting the wrongs, which was why they voted him into power.
The economic team, the agents of positive change to wrestle the economy from the grip of recession, however, appears to be slowing the process