How to Lift Nigeria's Economy Out of Recession

Of course recession is not a death sentence for the economy. Experts have stated that its pains could turn to gains for the economy within a short period if the Government takes the right approach.


Reactions have continue to trail the Nigerian Bureau of Statistics (NBS) Second Quarter Report that the economy has sunk into recession. The reactions came from stakeholders in the economy, such as manufacturers and analysts.

In the report, released on Wednesday, the NBS said the economy contracted by 2.06 per cent to record its lowest growth rate in three decades. It held that the economy shrank by 0.36 per cent in the first quarter to hit its lowest point in 25 years.

But the Federal Government seems to have risen to the challenge, promising to do its best to restore the dwindling economy to a growth trajectory within the shortest time possible. It has insisted that the present situation fared better than the prediction of the International Monetary Fund (IMFs).

The Vice president (North West Zone) Manufacturers’ Association of Nigeria (MAN), Ibrahim Usman, traced the recession to the dwindling prices at the global oil market. He urged the Federal Government to develop infrastructure to attract investment in the system, noting that in other climes, the governments drive the economy, giving it direction.

The MAN chief, however, admitted that there cannot be a quick fix out of the recession.

Usman, who is the Executive Chairman, Powerseal Nigeria Ltd, called on the government to quickly resolve the Niger Delta militancy issue, even as he acknowledged the government’s inroad into agriculture as the right thing to do.

He noted that affordable consumable goods and food items would ease the impact of biting economy on the citizenry.

Getting out of the current economic log-jam, he said, will require the diversification of the economy from oil and attracting Foreign Direct Investments (FDIs) in the solid mineral sector.

He said: “We must bring in investors to process our minerals locally by adding value before exportation. As a nation, we must not make the same mistake we made with the oil and gas sector where we export crude and import refined products.

“The government must create an enabling environment by ensuring that peace and security prevailed in the country. No investor would want to invest in a country where there is little confidence in the safety of his investment.”

Also, the economic think tank of Financial Derivatives Company Limited led by Bismark Rewane, after reviewing the NBS report, expressed optimism that “the lower-than-expected figures for July signalled a possible tapering in the rate of increase in consumer prices which might improve market sentiment,” stating that “market players are expected to react accordingly.”

The CEO of Pan Africa Development Corporate Company (PADCC), Odilim Enwegbara, urged the government to leverage on its expansive revenue base and spend its way out of the recession.

Govt should inject funds
His words: “To help our economy, the government needs to pump trillions of naira into infrastructure projects and trillions of naira into social intervention policies so as to make more money available to the citizens to boost their purchasing power, which if it happens will make these cash-strapped citizens start consuming, not imported goods and services but mostly locally made goods.”

Dr. Ogho Okiti, President and CEO of Time Economics Limited, canvassed a policy that will address the parameters that drag growth down except the oil prices, which he admitted the government has no control over.

“This include the aggressive implementation of the 2016 budget as we have seen in the last few weeks, but he cautioned that there is no quick fix”, he said.

The CEO of International Energy Services, Dr. Diran Fawibe, said the problem would have been half-solved by identifying the cause

According to him, Nigeria found itself in this crisis situation because it is a mono-product economy, underscoring the need to intensify its diversification efforts.

Fawibe who identified the government as the biggest spender in any economy, argued that “when this does not happen, it results into negative effects on other sectors of the economy.”

He described as unfortunate that the Federal Government no longer has the money to spend because of the tumbling crude oil prices and vandalism of oil facilities by militants.

He said the development has squeezed other sectors, making recession inevitable. He condemned the reliance on imported fuel to run the national economy.

Fawibe argued that the 35% of foreign exchange spent on fuel importation could have been used to give a lifeline to the manufacturing sector.

He said government must start rebuilding confidence in the economy to attract FDIs, adding that the parallel forex market (black market) should not be allowed to determine the naira value.

Diversification must be intensified
A telecoms expert, Bayo Banjo, urged FG to ban the importation of all food items, suggesting a six-month grace be given before enforcing ban.

Banjo, who is the CEO of Disc Communications, said the raw materials for which there are local substitutes should also be banned.

He cited India as a country that depends on broken down ships for its steel needs, lamenting that our country Nigeria spends money to clear it waterways of grounded vessels.

Banjo urged the government to assemble real economists and not businessmen to proffer solutions to the problems of the country. According to him, the capitalists at the corridors of power will never give advise against their own business interests.

He said it will be disastrous if Nigeria misses the opportunity of turning its economy around with the sincerity of President Buhari and his deputy Prof Yemi Osinbajo.