Tuesday, November 19, 2019 5:39 pm
The article you are about to read was published on this platform on Wednesday, October 12, 2016 (originally published in the hard copy). It was on the economy. Has Nigeria changed? Has the country recovered?
There is suffering in the land. The economy, permit the cliche, is on a tailspin! Since the role of the media is to generate ideas for good governance, we present a cover story in this edition that focuses on the difficulties that companies are facing , their domino effects and the agony of the common man.That is why, apart from its cover story that shows the sufferings of the people and the problems industries are facing, TheNEWS interviewed Henry Boyo, Ayo Teriba, Ifeanyi Uddin, Odia Ofeimun and Tunde Babawale on what to do to fix the economy. These are clear thinkers and analysts. You cannot doubt their sense of patriotism. They are not ethnic jingoists. Their sustained arguments are robust and worth considering. There is no garbled regurgitation of economic theories here; no unexplained technicalities. These gentle men do not parade themselves as economic wizards but they know their onions. It is proof that hope is not lost yet. We can overcome the current economic recession if we get serious as a nation. We hope that the solutions they proffer would help governments at all levels and individuals get out of the woods.
Hard Times, Urgent Solutions
Hard Times, Urgent Solutions
BY ADEMOLA ADEGBAMIGBE
It is usually the face- me-I- face you tenement where I- better- pass -my- neighbour smoke belching electricity generators whine away in high decibels and compete for space with kitchen cupboards, fowls and goats. Apartment rats here do not respect territorial integrity. Twitching their you-can -do- me nothing whiskers, they dart from room to room, wreaking havoc on cloths, carelessly dropped Naira notes, exposed loaves of bread, biscuits, uncovered amala and, most disastrously, toes of sleeping tenants. Cockroaches, the eternal paratroopers with brown jackets and nauseating exoskeletons, fly from one end to the other as if on war reconnaissance. Worse still, toilets and bathrooms are used on first come and first served basis. In such environment, short fuse is ever on display and trouble or mayhem is sparked at the drop of a hat.
To complete the stereotype, it is possible to know whose mother’s stew smells best or who uses the most delicious crayfish or locust beans or shrimp or periwinkles to temp many olfactory lobes. And so,on 21 September 2016, a man could not resist the aroma of his neighbour’s jollof rice at Ifite, Awka South Local Government Area of Anambra State. Hunger was gnawing at his internal organs and playing rumber within him. He was in his own apartment when a woman, Mama Ebuka, was cooking jollof rice, its good smell wafting all over the compound, creating admiration or irritation or envy or a combination of the last two. Only God knows what spices she put, he thought as he peeped through the window with the leer of a professional thief.
The man lifted his nose in the air like a supercilious camel, his Adam’s apple making horizontal clicks as he sniffed the way a blood hound would, near the hole of a rabbit. Then he hatched a plan in his own delicate brain matter to the effect that Mama Ebuka would not eat that jollof rice alone! A neighbour, Mr. Emmanuel Okafor, narrated what happened to New Telegraph that when the woman finished cooking, she left the pot on the stove and went inside her apartment. But, according to Okafor, when Mama Ebuka came out to dish food for herself, she discovered that the pot had developed wings.
In Okafor’s words: “She started asking who took her pot of food but nobody owned up to it. But a young girl told those who had gathered that he saw the man take the pot into his room. When the girl said that, we all rushed with the owner of the food to the man’s room only to see the pot of rice half empty.” He added that the man, a bricklayer who usually works at construction sites, “confessed he stole the jollof rice because he was very hungry and “had not eaten for three days. The man knelt down and started pleading with Mama Ebuka to forgive him. Mama Ebuka, being a religious woman, forgave the man. She even told the man to tell her to give him food next time instead of stealing.”
A neighbour, flexing his muscles and tendons, offered to deal with the food thief, but the jollof rice owner, a religious woman with deep sense of piety, promised she would not invite the police. For this reason, according to the report, people, especially those living in multi-tenant houses in the state have devised new ways of protecting their pots of food. “They either lock the pot inside a small cage or padlock the pot itself with a cross bar until they are ready to eat.” Okafor also added: “I know the man very well. He is not a bad person but I think the situation in the country is pushing people into things they would not ordinarily do. I am certain the worst is yet to come.”
True, the economy of Nigeria has taken such a whack that many Nigerians have devised different ways of survival by fair or foul means.
Acknowledgement of the Economic Situation
President Muhammadu Buhari, on 1 October, Nigeria’s Independence Day, made a broadcast to the nation, admitting that indeed, the economy is on clutches. In his words: “I know that uppermost in your minds today is the economic crisis. The recession for many individuals and families is real. For some, it means not being able to pay school fees, for others it’s not being able to afford the high cost of food (rice and millet) or the high cost of local or international travel, and for many of our young people the recession means joblessness, sometimes after graduating from university or polytechnic.”
Also on 1 September 2016, Buhari was in Oshogbo as a guest of Governor Rauf Aregbesola to commission Oshogbo Government High School built by the State of Osun. He acknowledged: “We are quite aware of the pains and inconveniences that have been the lot of the citizenry in the past one year as we strive to faithfully implement our programmes in fulfilment of our Change Agenda. We are, however, comforted by the real change and progress we have made in fighting corruption and restoring integrity to government; providing security for lives and property; and positioning the government for effectiveness and especially deregulating the oil sector.’’ He reminded his listeners that his government promised Nigerian people positive and progressive change during the campaigns, resolving that he and his team would not and shall not be deterred from that noble undertaking.’’
“But as we have learnt from history, change has never been attained by any nation on a bed of roses, but rather, through patience, perseverance and steadfastness,” he said.
On September 1, 2016, the National Bureau of Statistics, NBS, released a report on major economic fundamentals, like Gross Domestic Product, GDP; inflation, employment/ unemployment, capital importation, stating that Nigeria had slithered into recession. According to the Bureau, Nigeria’s GDP at constant basic prices, contracted in the second quarter 2016 (Q2’16) by 2.06 per cent after a negative growth of 0.36 in the first quarter. It said the non-oil sector suffered a downward spiral due to a badly battered Naira. Worse still, lower prices of crude negatively affected the oil sector. The Bureau added that inflation in the country increased to 17.1 per cent in July, because of rising cost of power, fuel and other consumables. The ogre of joblessness went haywire as it increased to 13.3 per cent this year. Among the youths, unemployment was 24 per cent. Taken generally, national unemployment rate increased to 13.3 per cent, compared to 12.1 per cent in Q1 2016, 10.4 percent in Q4 2015 from 9.9 percent in Q3 2015 and from 8.2 percent in Q2 2015.
The NBS figures, according to a medium’s analysis, showed Nigeria attracted just $647.1 million of capital in the second quarter, a 76 per cent fall year-on-year and 9 per cent down from the first quarter. It went further: “Nigeria’s economy was last in recession, for less than a year, in 1991, NBS data shows. It also experienced a prolonged recession from 1982 until 1984. The naira remained at record low of N423 per dollar in the black market, as dollar shortages curb activity on the official inter-bank market where the currency was offered at rates as weak as 365.25 this month before gaining ground after Central Bank’s interventions. The oil sector, the NBS said, contracted by -17.5 per cent year-on-year, compared with -1.9 per cent in the first quarter of 2016. The non-oil sector contracted by -0.4 per cent year-on-year, compared with a contraction of -0.2 per cent recorded in the first quarter 2016. For the non-oil economy, manufacturing contracted by -3.4 per cent, compared with -7.0 per cent in the first quarter of 2016.”
These have seriously affected prices and, by extension, standard of living. As the country celebrated its 56th independence anniversary last week, some women in the Federal Capital Territory (FCT) decried the continuous hike in the prices of food items in the market. Some of them, who spoke with the News Agency of Nigeria (NAN) in Abuja called on government at all levels to “introduce price regulatory system to protect the consumers from unwarranted price hike.” Mrs Agnes Itoro, a housewife, told the Agency that some traders were using the pretext of the economic recession to hike prices of food items on a daily basis and indiscriminately. In her words: “My husband gives me N10, 000 for the purchase of food items every month for four members of my house. But now even if he releases N15, 000 or even N20, 000, it will not be enough for the list of items I normally purchase. I normally use some of the remaining monies from the market to cater for my needs. Now, it is not even enough for the items we need at home monthly,’’ she said.
A civil servant, Mrs Lilian Ibekwe, according to the same report, said prices of food items had increased but there was no increment in salaries to complement it. She said,”this issue needs urgent attention, if not people will begin to eat once in a day”. Mrs Florence Iwotor, a food vendor, said the increase in the prices of food items was negatively affecting her business.
“I cook and sell food but at the end of the day, I do not make any profit because I do not even cover the cost of goods bought. I am contemplating quitting the business because I put a lot of efforts under the rain and the sun still I do not make the desired profit to make ends meet in my family,’’ Iwotor told NAN.
Meanwhile, the survey conducted by the agency in some markets in Utako, Nyanya and Mararaba markets revealed that prices of some food items had doubled. A carton of iced fish at Utako market, previously sold between N12, 000 and N12, 500, is now being sold at N22, 000 depending on the specie of the fish at Nyanya market. A bag of rice which was sold between N7, 000 and N12, 000 now goes for between N17, 000 and N22, 000 in all major markets.
A 20-litre gallon of red oil which was sold between N7, 000 and N9, 000, now sells for N12, 500 at Mararaba market. Also, a 20-litre gallon of vegetable oil sold at N6, 000 and N8, 000 previously now sells at between N12, 000 to N13, 000. A bag of garri which was sold at N6, 000 is now being sold between N10, 000 and N12, 000. Mrs Uche Ajegba, an iced fish seller at the market, attributed the increase in the price of fish to increase in import duty and exchange rate. Some traders in the market told the medium that they were selling according to the price they bought the products.
Like people from other parts of the country, the people of Edo are not shielded from the biting economy. Resources are meagre and scarce. The times are hard. Everywhere you look, hunger stares you in the face. Day-to-day living has become a matter of survival of the fittest by whatever means possible. Prices of food items and essential pharmaceutical products have increased astronomically within the last few months.
TheNEWS survey reveals that a big bag of beans that sold for between N12, 000 and N15, 000 last year now sells for about N28, 000. A bag of imported rice that used to sell for between N8000 and N12, 000 (depending on the brand) last year now goes for between N20, 000 and N25, 000. A small plastic measure of wheat that sold for N500 before is now N1, 200. A 20-litre keg of palm oil used to sell for N4, 000 or N5, 000 is now about N9, 000 or N10, 000. A 25- litre of Kings vegetable oil that was sold for about N6, 000 is now N25, 000. The same thing goes for iced fish, frozen chicken, vegetables, soup ingredients and many more.
Prices of essential drugs have also skyrocketed. A sachet of paracetamol tablet went up from N20 to N30, anti malaria products like Coatem, Lonart, Artesunate and others now attract between 100 and 200 per cent higher than last year. Price of gari, the hitherto staple food for many Nigerian families, soared. A small paint ruber that used to sell for N250 jumped to N700. Rice is a no go area. Many, especially those with large families, could no longer afford it or eat as much as they used to.
Recently, a man walked with his son to a woman selling gari in the popular Osa Market, in Benin. After bargaining with the woman and arriving at a price, he asked for some quantity and was given. He thereafter asked that his son wait with the woman as he went to get the money from across the road. But after waiting for several hours and it became obvious but that find the man had abandoned his son, the woman had to take the boy to the nearest police station where she incidented the case. Upon enquiry, the boy was able to trace the way to their home. They were alarmed to see the man in company of his other children, eating from part of the gari, already soaked in water, with groundnut. Upon interrogation, the man was said to have confessed to the crime and blamed it on hunger. Upon learning what caused the man’s action, the broken-hearted gari seller had no option than let him be. Stragenly, this type of story also happened in Ilesha, Osun State.
Kerosene, the most common fuel for cooking, is another issue challenging the survival of the people, as it has gone beyond their reach. At a point even when sources of income were at the lowest, a litter of kerosene was sold between N230 and N250. Many could not afford to buy this essential commodity to cook meals for their families, for which reason many are devising means, both to get what they need.
There was a woman who, in desperate need of kerosene, went to where the commodity was being sold, filled her receptacle and asked the son of the seller to follow him to her house to collect the money. But along the way, she instructed the young child to wait for her because she wanted to ease herself. The unsuspecting boy waited and waited for a long time, till his mother, who could not understand why it took so long for her son to return, had to trace him to where he was. To her chagrin, she discovered that the woman had successfully, duped her and made away with her money.
Since the beginning of the year, staff of the University of Ibadan, UI, are paid half salary. One of the worst hit is the tertiary institutions owned by Oyo as the state government has stopped paying their salary, asking them to generate funds that will be used to pay them. As a result of this, for instance, staff of UI have cut down their expenses and reduced humanitarian activities extended to their own families and friends.
Also, most people have reviewed their purchasing strategies. A woman said, “My husband ate only ‘panla’ before but now, he eats other fish that is not as expensive as ‘panla’. Because ‘panla’ is too expensive, the least you get is N700, I have changed to titus and ‘kote’. Though, he complains but there is nothing I can do. Most time I feel bad when he eats his food and leaves the fish. He doesn’t know how painful leaving the fish is for me but I understand because over ten years that I have married him, he has not been eating any fish except ‘Panla.’”
Neighbours now use different means to defraud themselves just to survive. A man who reported his fellow landlord at the Landlords Association said, “He called me on phone to tell me that I should lend him N1, 000 to buy food for himself and his children. He said that he just returned to the house and met his children outside. He said that his children told him that his wife had taken out the house key and he could not have access into the house to take money and buy food for himself and his hungry children. He promised that as soon as the wife returns, he would send the money to me. I obliged him. But the man never repaid the money and he is not even talking about it”.
When the man was invited by the Landlords Association, he simply replied, “I didn’t have money to eat and I had to use my brain to collect money from the man to buy food for my family: myself, my wife and my children. Well, I am sorry that I have not paid him back”.
Some people have formed the habit of going to party to feed themselves and if possible, bring food for their children. A man in Ibadan who recently celebrated a naming ceremony fought his immediate younger sister who was caught packaging food for his friends to take home. He said, “First, I never knew that people will turn up like that. I slaughtered one cow and one goat. My sister came with many friends and they all ate to their satisfaction and drank. I gave them whatever drink they asked for. At a point, I realized that food was about to finish and I was very surprised. How can one cow and one goat finish like that and I am still expecting some friends? It was during that period that I saw my younger sister giving her friends take-aways and I called her and told her that she should not do that because people were still coming and she flared up”.
Most undergraduate students are now withdrawing from their academic programmes because they cannot pay school fees. A lecturer in UI said, “There is a Master’s degree student who had written first semester’s exam and he has not paid his school fee and as things stand, he might withdraw.”
As it is in Ibadan, so also is the case in Kano, Kaduna, Enugu, Asaba, Ilorin, Yola, Makurdi, Lokoja and other cities, towns and villages in Nigeria.
Companies Are Also Affected
In August this year, Dockworkers Union of Nigeria (DUN) complained bitterly that over 3,000 workers had lost their jobs in Nigerian ports as 20 shipping companies, affected by the economic difficulties, relocated from Nigeria. Some of them are: Mitsui O.S.K Line, Nippon Yusen Kasha, Taiwan’s Evergreen Line, Messina Line, Hapag-Lloyd and Gold Star Line (GSL) and others. Along the chain, terminal operators and logistic companies, have also shed weight.
The President of DUN, Anthony Emmanuel Nted, was quoted by The Guardian, that some of the employers of Intels and other logistic companies, which render services to the International Oil Companies, IOCs, are being faced with financial challenges and therefore forced to retrench workers. He said: “The non-payment of cash calls by government to these oil companies as per their joint venture agreements has been a major setback to the funding of the service of our employers (the logistic companies) and consequently responsible for the massive retrenchment of our members.”
The report indicated that the Maersk Supply Service, a part of Danish shipping and offshore energy conglomerate Maersk Group, “is apparently adopting austerity measures as it moves to reduce its Offshore Supply Ship Vessel (OSV) fleet by 20 in the next 18 months, even as it plans to reduce its crew pool by 400 offshore positions.” The Chief Executive Officer of Maersk Supply Service, Jorn Madsen, said: “We are facing unprecedented market conditions, and regrettably we have to further adjust our crew pool. It is an unfortunate, but necessary step to safeguard the future of our company”.
Same August, Sun International,which has 49 per cent equity in Federal Palace Hotel, revealed that because of the “challenging economic conditions…”, it was also leaving Nigeria. Bloomberg reports that Sun International bought 49 per cent of the Nigerian Stock Exchange (NSE)-listed Tourist Company of Nigeria (TCN) 10 years ago, giving it part-ownership of Federal Palace Hotel, Victoria Island, Lagos. Occupancy rates at the property fell to 42 per cent. “The Federal Palace continues to operate in a difficult environment with the Nigerian economy facing a number of crises including the low oil price,” the Johannesburg-based firm lamented. The Islamist insurgency led by the Boko Haram group and a weakening naira also hurt trading, while an “ongoing shareholder dispute has frustrated all attempts to develop and improve the property,” the company further said.
Other South African companies that have left Nigeria, according to the report, include retailers Woolworths Holdings Ltd. and Truworths International Ltd., citing tough regulation and rising costs. Johannesburg-based MTN Group Ltd.,Africa’s biggest mobile-phone provider, agreed to pay a N330 billion ($957 million) regulatory fine in the country earlier this year, leading to its first-ever half-year loss.
The aviation sector has also been hit by the economic problem. On 1 September, Aero Contractors Airlines suspended all its operations indefinitely. Mr Fola Akinkuotu, the company’s boss, explained: “The airline has faced grave challenges in the past six months, which impacted its business and by extension the scheduled services operations.’’ Some foreign airlines operating in Nigeria, according to the report, have decided to seek other lands where the grass is green. They are Iberia, United Airlines and Air Gambia.
Foreign airlines operating in the country are estimated to have lost about N64 billion since the start of the new forex policy of the Central Bank of Nigeria (CBN). Bankole Bernard, president of the National Association of Nigeria Travel Agencies (NANTA), complained that the new forex policy and the bad state of the economy “came with a substantial negative effect on travel agencies, which is why they have decided to exit the country.”
Worse still, Patterson Zochonis (PZ), is planning to relocate to Ghana. Cadbury Nigeria Plc, Unilever and the International Institute of Tropical Agriculture (IITA) this year, sacked sizeable number of their workers over reported high cost of production
How the Mess Started
There are arguments about the roots of Nigeria’s economic woes. While many linked it to the past, others blame low oil output and crash in oil price. However, other critics see a more fundamental problem, waving off the old ones as the effect of some logical causes.
Buhari, in his Independent Day broadcast, said the damage perpetrated by Niger Delta thugs on pipelines sometimes reduced Nigeria’s production to below one million barrels per day against the normal two point two million barrels per day. “Consequently, the naira is at its weakest, but the situation will stabilize,” said he.
Ayodele Olalekan Teriba, Chief Executive Officer, Economic Associates, a firm of consultants, argued in his interview with TheNEWS that the oil price slump since July 2014 has meant two years of sharp declines in foreign exchange supply that has precipitated a large devaluation and a recession. Attempts to restrict demand for imports in the face of reduced supply of foreign exchange from exports had, as he put it, largely been responsible for the recession, and floating the currency without first creating foreign exchange supply buffers led to the large devaluation. Government is now trying to articulate measures that would help the country to fix the foreign exchange supply shortage, restore confidence, and turn the economy around. He added: “Up till now Nigeria has relied almost exclusively on volatile export earnings for foreign resource inflows. The collapse in our export earnings means that we now have to look for more stable foreign resource inflows.”
Then backward integration, as he explained, cannot happen in the face of infrastructure failure, because we can’t get manufacturing or mining to boom in the face of high road transportation cost. He added: “No country that is integrating backwards relies on road transport for haulage. If you want to integrate backwards; you rely on rail for haulage. When rail worked, Nigeria integrated forward and backwards; manufacturing boomed, agriculture boomed, Nigeria’s major cities grew around rail termini. The rail is now dead, so is agriculture, as much of our harvests cannot leave the farm because only crops that can afford road transportation can leave the farm and get to the market. If the market price of the crop is not up to the road transport cost, the crop will rot at the farm.”
Tunde Babawale, a Professor of Political Science and Dean, Students Affairs, University of Lagos argued that there is every indication that the problem that is currently confronting the Nigerian economy could be traced to the past, about 2011, caused largely by the failure of government to save for the rainy day and the declining prices of oil in the international market which started as far back as that period. The second point, as he put it, is that the slowdown in the economy which started at that time should have elicited an imaginative response from the Nigerian ruling class and such imaginative response should have included “cutting down on waste, reducing drastically the cost of governance and frontally tackling corrupt practices which seemed from that period to be multi-faceted and multi-dimensional.”
For Ifeanyi Uddin, it is a much deeper story, because, over the years since Nigeria became independent, it has failed to invest properly. When it did, the country often opted for big projects that have no backward linkages to any sector of the economy. And in those periods when Nigeria had bonuses from the over-performance of its leading export, oil, Uddin lamented that we “have spent as if it was a crime to save.” He argued further that agriculture is still rain-fed and subsistent; there is no rural infrastructure; no roads to evacuate produce; no farm gate pre-processing to ensure that spoilage is not plenty.
Uddin added: “We are at that point where crude oil prices have dropped precipitously from about US$114 per barrel mid-July 2014 to US$44 per barrel for West Texas Intermediate; 90 per cent of export earnings is crude oil. About 80 per cent of the federal budget is oil earnings receipt. So you cut that by two-thirds and government has no money to spend. Much of the foreign currency liquidity in the economy to date has been provided by the CBN that also benefitted from oil being sold at elevated prices. Oil is no longer sold at those price levels and corporates that have huge imported inputs needs are also in deep trouble. That is where we are today. Our problems go way, way back in time.”
Also on the finacial market that is in a mess, Babawale posited that the timidity that has been exhibited by the leadership of the Central Bank of Nigeria, CBN, was responsible. Even though the law talks about the independence of the CBN, the professor lamented that what has happened in the last one year has shown everybody in practical terms that the CBN only watches the body language of the president or the presidency and will not do what it thinks should be done simply because it feels that it will not be pleasing to the government. That is not to role of the CBN. The CBN, as Babawale argued, should put in place fiscal and monetary policies that are deemed right for the situation. He cited the example of how the continued existence of two different rates did a lot of damage to the economy.
Henry Boyo, an economist and industrialist, expanded this further. He first blew into smithereens the argument that Nigeria’s economic problem started from low output and low price of oil but he asked rhetorically: “When crude oil prices were $120 and output was reasonably consistent about 2 million barrels a day, did we not earn twenty more dollars, did our reserves not totally explode and expand that we had over sixty something million dollars a year, did your life improve? Did employment rate in the country improve, did industrial production improve, did inflation come to best practice of 2 or 3 per cent? If the answer to all the above is No, then you must admit that it is not the output of your crude oil that will save us. Yes or no. so if you are looking for the answers to your solutions you should be looking outside identifying crude oil output and price as a major cause, crude oil price and output only exposed the fowl’s “yansh.” The thing has been defective all along.”
Rather, Boyo situated the problem in certain indices which drive or retard economic management and these are managed by the CBN. Without a proper management of these indices, Boyo argued, you will never be able to achieve meaningful goals. The indices are inflation, monetary policy and cost of money. Boyo said, therefore, that the “operation of an economy is an articulated process, inflation affects cost of funds, cost of funds affects industry and industrial activities so if you ignore or deny the relevance of sustaining these indices at best practice levels, you are postponing the evil day…”
Odia Ofeimun heaped blame on the Olusegun Obasanjo government saying: ‘‘He never created a strong production base that could amortise any debts he ran into. You then had a situation where he appeared to be pilling up reserves after oil prices jumped but without knowing what to do with them. Whereas at that point in time it was not about having a bumper external reserve, it was about creating productive agencies within Nigeria that could make it unnecessary for us to need as much external reserve as they were building up. Once Obasanjo lost that fight he was bound to need a third or a fourth term because he had spent so much time beating about the bush, rather than developing the Nigerian economic system.’’
What Federal Government Should Do
According to Buhari on Independence Day, there are no easy solutions, but there are solutions nonetheless and government is pursuing them in earnest. In his words: “We are to repair our four refineries so that we can produce most of our petrol requirements locally, pending the coming on stream of new refineries. That way we will save ten billion USD yearly in importing fuel.” At the same time, he added that the Federal Ministry of Agriculture and the Central Bank have been mobilized to encourage local production of rice, maize, sorghum, millet and soya beans to achieve domestic self-sufficiency in these staples by 2018.
Already farmers in 13 out of 36 states are, according to him, receiving credit support through the Central Bank of Nigeria’s Anchor Borrowers Programme. Kebbi State alone this year is expected to produce one million tonnes of locally grown rice, thanks to a favourable harvest this year. As part of the 13 states, Lagos and Ogun are, as he put it, also starting this programme. Rice alone for example costs Nigeria two billion USD to import.
Teriba also advocated foreign direct investment because it is a less volatile way of getting foreign exchange than export earnings. He cited how Nigeria funded the successful telecommunications reforms and the LNG project with foreign direct investment.
Babawale too posited that government should pump more money into infrastructure -even if we have to borrow- through which employment can be generated. Moreover, he maintained that it will enhance the capacity of the government to generate employment, for industries to function, for taxes to be paid and enhance the revenue that will be accruable to states to make them less dependent on bailout. He advised also on diversification through tourism. In his words: “The problem with us is that successive governments have been given the blueprint contained in a document called the Tourism Master Plan but unfortunately, we have not had the courage and the time to implement the ideas contained in that document.
Secondly, tourism has not been the revenue earner that it should be in Nigeria because government is not serious about tourism. For example, we have opened relationship, people like me, when I was in CBAC, we opened relationship with Brazil and other areas of the African Diaspora and many of them were interested in coming even if it is religious tourism, but we needed to provide an atmosphere where those tourist sites were developed where you have security, good roads and all of them.”
In other to tackle the economic recession in the country, the Nigerian Institute of Social and Economic Research (NISER), Ibadan has also urged the Federal Government to immediately release funds aimed at boosting the operations of the Micro, Small and Medium Scale Enterprises in Nigeria (MSMEs). NISER equally called for the collapse of all barriers and obstacles to loan information through advocacy and sensitization by appropriate agencies.
There is also the argument on whether or not some national assets should be sold. According to Charles Soludo, a former CBN governor, this proposal is based upon a false foundation. He argued: “Such hasty auction of national assets can only benefit a privileged few with cash while jeopardising Nigeria’s long term meconomic interests.”
However, Bayo Adeyinka, a banker, has this to say: “My answer is yes but selectively. I believe we should sell off the refineries or concession them. I believe we should greatly reduce our holdings in AFC to free up some badly needed cash. I believe we should sell at least half of the presidential fleet. I believe we should reduce our shareholding in those oil and gas joint ventures. I believe all federal airports should be concessioned. If London Gatwick Airport which is Europe’s 9th busiest airport and the 37th busiest airport in the world can be sold off, there is no point retaining those airports that are more or less conduits for corruption and a drain on the nation’s resources. FG’s stake in NNPC should be greatly reduced so the behemoth can be more effective.”
Also, Atedo Peterside, chairman of Stanbic IBTC argued that if assets sales are done stretegically, ‘‘they can briing forex, improve efficiency and reduce strain on existing resources.’’
How Individuals Can Survive the Hard Times
Bell Inuah, chief executive officer at NOIPolls (in a poll the organisation conducted with BusinessDay) revealed that about 37 percent of Nigerians said they were cutting down on household expenses and luxury items. “What that means is that those little ice cream, suya, nkwobi, pepper soup, and those little extras that Nigerians used to delight themselves in, they are cutting them out.
“Everyone, at least those we spoke to, are now focusing on the basics. Basic clothes, food to eat, almost 47 percent. We also have those who told us that they have adjusted their family feeding pattern. So in the past where they used to have 1-1-1, they are now having 0-1-0, meaning nothing for breakfast, a strong lunch and in the evening, eat something light and then go to bed. Some go for 1-0-1. So family feeding patterns are now being readjusted,” he said.
Inuah disclosed that many people now opt for second-hand clothes, which unfortunately do not also come cheap because of the high exchange rates. There are also cases of people interviewed going for the creation of alternative sources of income, especially in the use of their talents. Then another thing is the purchase of locally-manufactured products because of the high cost of foreign products.
There are also clear cases of families increasingly engaging in subsistence agriculture to plant, say, some vegetables in their backyard to sustain living.
He added: “There are also those who said they have cut down on their transport to trekking, so Nigerians are now trekking a little more to be able to cover up transport expenses as a result of the hike in transport costs.” There are also increasing cases of dependence on family and friends. In Maiduguri, Inuah revealed that there is hardly any family that does not have Internally Displaced Persons (IDPs) living with them. You must be able to harbour one or two. “Someone told me that the amount of calls he gets now from people asking for money is unimaginable,” he said.
For Ifeanyi Uddin, the Nigerian salary man is not an entrepreneur. “You need a shift in paradigm and mindset to get this people ready to take part in a private sector-led economy, so you find that the salaries are not paid and there’s not so much that they can do because there is not so much that they have been asked to do up to this point. For most people it is to be more prudent, and try to see if we can string income along without inflation wiping out both savings and current spending.”
Additional reports by Lanre Babalola, Okafor Ofiebor, Gbenro Adesina, Jethro Ibileke, Kazeem Ugbodaga