Nigeria’s recession may last till 2020

Former President, Nigerian Bar Association, NBA, Dr. Olisa Agbakoba, yesterday, expressed concerns that Nigeria may continue to experience the current recession cycle till 2020, if the President Muhammadu Buhari-led Federal Government fail to immediately bounce the economy massively.

Agbakoba, who spoke in Lagos, lamented that having done a diagnosis of the nation’s current economic woes, it seems to be complicated by inflation, high interest rates, unemployment, weak infrastructure, lower oil price and no growth economy.

In a statement made available to journalists, the human rights and maritime lawyer, who had an analysis of President Buhari’s economic policy pointed that cohesion is needed at this point, noting that there is a need to develop a coherent fiscal, trade and monetary policy. 

According to him, the tight liquidity operated by the Central Bank of Nigeria, CBN, where it jerked up its Monetary Policy Rate (MPR) to 14 per cent is ridiculous, adding that CBN’s focus on Forex management is rather encouraging round tripping and creating asymmetry in the system. 

The legal practitioner advised the CBN to focus on productive value of the economy and not the numerical value of the naira, saying “the full deregulation of the forex market to allow level playing field and removing distortions such as round tripping, will ensure that at least $20 billion inflow will instantly occur.” The former NBA Chairman, who listed a number of solutions for President Buhari to revive the economy said there is an immediate need for “a Presidential Proclamation at the National Assembly, switching from austerity to growth policy. 

The Federal Government needs to spend more to boost growth.” Agbakoba, however, pointed that President Buhari doesn’t need the envisaged economic emergency powers, noting that former President Shehu Shagari had it in his time and still failed, adding that the so-called economic emergency powers is also not working in Venezuela. Agbakoba, further said “President Buhari must reverse the anti-austerity and tight money, as the G-20 nations all now agree; use all policy tools and embrace fiscal stimulus; adopt the Keynesian economic model of massive government spending on public works; reducing the raging inflation at 17% in medium term; reduce the Monetary Policy Rate (MPR) to single digit- 5 per cent Quantitative Easing and effectively implementing the 2016 Budget to reflate the economy.” 

He added that to revive the economy, “Nigeria must spend its way out of recession; establish a National Treatment Policy- Fiscal and trade Protection Policy, establish urgently a Development and Guarantee Bank; prepare Public Sector Borrowing Requirement, PSBR and borrow as our debt Ratio can sustain this, as well as develop Assets securitisation.” According to Agbakoba, there is need for the Federal Government to pay-off the country’s domestic debt to inject liquidity in the system. He suggested that FG must give the Treasury Single Account, TSA money back to the banks at single digit rates and supervise the banks, even as he recommended lending base rate of 5 per cent.

 

Prudential Regulatory Authority Dr. Agbakoba added that to reflate the nation’s economy from recession, the Federal Government must create a Prudential Regulatory Authority, PRA, to supervise commercial banks to lend, as well as create a Financial Conduct Authority, FCA, to get banks to behave. “Consequently, the Federal Government must limit the CBN to Monetary Policy and take away banking supervision to the new Prudential Regulatory Authority, PRA and banking ethics to the Financial Conduct Authority, FCA. 

If the banks focus on lending and not trading, money will flood the system for productive value. Moreso, there is need to create a debt factor market to soak up non performing loans of banks now at 12 percent and in excess of N20 trillion. FG must also create a robust mortgage private sector led market, by waking up dead capital trapped in the national housing stock valued at $7 trillion. “Government must get out of business and enable the Private Sector led growth. It must also massively fund small businesses by Development and Guarantee Banks as this is the engine of economic growth. 

I have expected the government to by now implement massive social benefits such as the N5,000 it promised Nigerian youths,” said the legal icon. Further suggesting the way forward, Agbakoba advised the current leadership to as a matter of urgency, “begin to communicate and give Nigerians hope with a clear vision, like former America President, Franklin Delano Roosevelt, FDR, during the American great Depression; urgently explore alternative income sources-Agriculture, Maritime, Infrastructure Power and support, as well as create efficiency in government and consider re-balancing Federal Power to bring in the States as economic enablers.” 

“President Muhammadu Buhari must as a matter of urgency, carefully study Roosevelt’s new deal that got the US out of the Great Recession (Depression) in the 1930s. “Roosevelt communicated hope; created massive public works programmes, especially the momentus Tennesse Valley Authority, a depressed 640, 000 square mile area in the Tennesse Valley; enacted the Glass-Stengall Banking Act, directing banks not to speculate or trade but to lend; enacted the National Industrial Recovery Act, to deal with massive employment and created the Works Progress Administration, putting back millions to work on the public infrastructure,” he said. Recovery Path According to Agbakoba, despite the country’s current state of recession, “a recovery path is possible by the Second Quarter of 2017 (Q2 2017) with vigorous implementation of a new economic model, otherwise, this recession cycle may/will extend up to Fourth Quarter of 2020 (Q4 2020).”

Vanguard

Nigeria's fight against bad health and malnutrition

As world leaders prepare to converge in New York for the 71st United Nations General Assembly, the delegates face an even more diverse set of challenges than usual.

The peace and development paradigm through which the annual meeting is held has a further dynamic to deal with this year, which is the proliferation of multiple humanitarian crises. While some are solvable, the crises in Syria and South Sudan seem intractable.

The situation in northeast Nigeria where the UN has estimated that nearly 4.5 million Nigerians, already threatened by Boko Haram, are now at risk of food insecurity and famine is also a cause for concern (PDF).

That such a situation can arise in Africa's largest economy is a sad indictment of Nigeria's continuing inability to fully protect and provide for some of its most vulnerable citizens. We can and must act now.

Failing healthcare

The food crisis is a result of three factors: conflict with Boko Haram; the need for more aid financing; and, most critically, the lack of state structures and coordination to help those at risk.

The conflict with Boko Haram is showing tentative signs of success. The terrorist group has been pushed out of successive towns and villages it once occupied in northeast Nigeria. The army is, slowly but surely, reasserting control and security over the region.

But this is only one part of puzzle. The conflict has left widespread devastation in its wake, and women and children have borne the brunt. Of the internally displaced persons (IDPs) in Borno, Yobe and Gombe, children account for up to 50 percent of those in need of humanitarian assistance.

The appalling health conditions of camps for the displaced and host cities alike were brought sharply to the public eye last month, when it was reported that only weeks after declaring Nigeria polio-free, this life-threatening illness left two toddlers paralysed in Borno.

The precarious situation in the north has prevented up to half a million children from getting polio vaccinations in the past year, as the weakness of the healthcare system has been compounded by regional instability, which has rendered remote areas increasingly inaccessible to health workers and aid.

Failure to vaccinate can wreak havoc across communities for years to come, making it absolutely vital that everything is done to ensure that all children receive the necessary immunisations, regardless of the challenges that this may pose, and that every immunisation is recorded.

It is hard to quantify in numbers but it is clear that a whole generation of mothers and children have been affected by violence and now by hunger and disease in northeast Nigeria.

Malnutrition is the underlying cause of morbidity and mortality of a large proportion of children under five in the country - in the northeast it is considerably higher.

Equally, in Nigeria mothers have a one in 13 chance of dying in pregnancy and childbirth - that figure jumps massively in the northeast.

Nationwide, Nigeria is actually seeing progress on maternal care even though less than 20 percent of health facilities offer emergency obstetric care and only 35 percent of deliveries are attended by skilled birth attendants.

Those figures are still encouraging when compared with the lack of provision in the war-torn northeast. Many women and children also find their plight compounded by dislocation.

Nigeria has to do better

Nigeria and the international community are starting to act. The Nigerian Senate is pushing to enact a motion to secure an additional $290m in aid for the region, while the international community has begun to ratchet up commitments marked by a four-day visit to northeast Nigeria in late August by the UN Special Rapporteur on human right for IDPs, Chaloka Beyani.

Nigeria has proved that through a concerted and coordinated effort, disasters can be averted. The horrendous Ebola outbreak that caused such devastation throughout Nigeria's west African neighbours was successfully contained in Nigeria.

This is in no small part due to government planning and structures. Equally, there is a precedent for state and non-state collaboration.

For example, on infant and maternal health, the Wellbeing Africa Foundation, has managed to scale its pioneering MamaKits - a birth package containing essential sterile items, facilitating improved birth hygiene and mitigating the risk of infection - across large parts of Nigeria.

If we can replicate such coordination we can stop the risk of famine in Nigeria, it is not simply an issue of money.

It is time to have a frank conversation about how to put the necessary structures and standards in place to ensure ill-health and malnutrition are addressed, before they become endemic as they have in the northeast.

This is not a country-specific problem. Many countries in Africa have adequate foreign aid, and adequate policy initiatives but the process falls apart once implementation begins.

This is at least understandable for some states but for Nigeria - considering the stage it is at and its development journey - the country should be doing better. It has to do better.

By Toyin Saraki

Al Jazeera

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