Buhari regime’s second recession: Cut governance cost, aid production, diversify, experts tell Federal Govt [PUNCH]
Economic experts and interest groups in Nigeria’s economy on Sunday advised the Federal Government to reduce the cost of governance and encourage production.
Experts and groups including a professor of political economy and management expert, Pat Utomi; the Abuja Chamber of Commerce and Industry and a former Deputy Governor of the Central Bank of Nigeria, Dr Obadiah Mailafia, gave the advice in separate interviews with The PUNCH while commenting on Nigeria’s recent economic recession.
They said government should cut tax for the poor and diversify the economy. According to them, in diversifying the economy, government must match its words with actions.
Amid a rising debt profile, inflation and unemployment, Nigeria on Saturday entered its second recession in five years as official figures showed that the economy shrank again in the third quarter of this year.
This year’s recession is the worst in 36 years as data obtained from the World Bank indicated that the country’s Gross Domestic Product dropped by 10.92 per cent in 1983 and 1.2 per cent in 1984.
The National Bureau of Statistics, in its report for third quarter of 2020, said the GDP, the broadest measure of economic prosperity, fell by 3.62 per cent in the three months up till September.
On Sunday, Utomi, in an interview with one of our correspondents, said government must rebuild trust of the people.
He said, “The starting point of any policy initiative is rebuilding trust of the people. The cost of governance in Nigeria has been growing for years. It got worst recently.
“Secondly, it is important that Nigeria moves from consumption to production. Part of the problems in Nigeria is that we are oriented to consuming what we do not produce. Nigeria’s economy does not produce. Public policies are geared towards sharing revenue than production.
“The fact that the environment for production is made hostile by government policies and weaker institutions has not made it any easier. We have to do everything to avoid going the way of Venezuela (which is currently experiencing total economic collapse and hyperinflation).
“We need people who are champions of production to be inspired and encouraged.”
He asked the government to stop funding old business leaders and invest in younger ones who are not looking to exploit the system.
Nigeria’ll slide into recession again – ACCI, others
The President of the ACCI, Adetokunbo Kayode, and the immediate past Chairman, Nigerian Electricity Regulatory Commission, Sam Amadi, in separate interviews with our correspondents, said government must take shrewd decisions to save Nigeria from the current recession and further economic shocks.
The ACCI president said government must take practical steps to diversify the economy and stop reliance on oil.
Third recession imminent unless FG diversifies economy, Abuja Chamber of Commerce
He said, “Nigeria will come out of this recession but the unfortunate thing is that we will go back into it again. So, it is an in-and-out thing unless we learn lessons. We have to learn serious economic lessons and take some decisions.
“One, we must diversify the economy. The government has been saying that it wants to do it, but it is just on paper. And it is simple to do this; you must produce what you need.
“This is so that you can reduce your imports. Government should develop industrial parks in partnership with private sector players. Government seems not to have learnt its lesson from the recent #EndSARS protest.
“We have too many people on the streets and the street is more powerful than the office. The guys in office started the #EndSARS but they were over-powered by street boys.”
Tax luxury goods – Amadi
On his part, the former NERC chairman, tweeted on Sunday that the President, Major General Muhammadu Buhari (retd.), had got Nigeria into a second recession under his regime and should take the country out of it.
Amadi said, “Since @NGRPresident has got us into a second recession, it has a responsibility to get us out quickly. To start, it should refocus from feeding the rich and starving the poor.
“It is now time to tax luxury items, reduce salaries and allowances of the upper level and reduce tax on poor.”
On his part, Mailafia said Nigeria relapsed into another recession because the people had lost confidence in the system.
He noted that because of the high level of insecurity, people in the North-West, North-Central and North-East had abandoned their farms.
He added that the same problem was in the South, leading to the rise in inflation.
According to him, investments in the country have dropped, thus jobs are not being created.
The former CBN deputy governor, therefore, advised government to restore people’s confidence by addressing insecurity so that people could go back to farms.
He warned that unless this is done, things will get worse next year.
The Chairman of Foundation for Economic Research and Training, Prof. Akpan Ekpo, described the current recession as a special type “as it affects both the demand and supply sides of the economy.”
The former Director-General, West African Institute for Financial and Economic Management told one of our correspondents that the government would have to spend a lot of money by increasing workers’ wages and capital expenditure to get the economy out of recession.
“The government has to have investment policies and strategies that will encourage private investors to invest,” he said, adding that there was a need to intensify efforts to diversify the economy.
Ease Lagos-Ibadan Expressway congestion for Christmas, Fashola tells contractors [PUNCH]
The Minister of Works and Housing, Babatunde Fashola, on Sunday said the Federal Government would complete the Lagos-Ibadan Expressway project despite scarce resources as a result of the sharp drop in oil prices.
Lagos-Ibadan Expressway is a trunk A road located in the South-West region of Nigeria. It was contracted in two sections (I and II) to Messrs Julius Berger Nigeria Plc and Messrs Reymond Construction Limited respectively.
At an interactive town hall meeting with stakeholders at Ogere in Ogun State, Fashola told the contractors to ease traffic congestion during the forthcoming yuletide period.
He said the dual carriageway commenced from the old toll gate at Oregun/Ikosi-Ketu Lagos and terminated at Shagamu Interchange in Ogun State.
This was contained in a statement issued in Abuja by the Director, Press and Public Relations, Federal Ministry of Works and Housing, Boade Akinola, on Sunday.
Fashola noted that the Section ll, about 84km, started from Sagamu Interchange to Ibadan and was being handled by RCC.
Fashola said the rehabilitation, construction and expansion of Lagos- Ibadan dual carriageway, construction of 2nd Niger bridge and the rehabilitation, construction and expansion of Abuja-Kaduna-Kano dual carriageway were strategic infrastructure development projects.
The minister was quoted as saying, “These highway projects are financed with the Presidential Infrastructure Development Fund funded from the Sovereign Wealth Fund and they are national priority highway projects.”
Fashola appealed to contractors handling the project to accelerate work to ease traffic flow especially during the forthcoming Christmas season.
The Director, Highways Construction and Rehabilitation of the ministry, Olufunsho Adebiyi, said the initial contract was only for the rehabilitation, reconstruction and expansion of Section l (Lagos to Shagamu Interchange) and Section ll (Shagamu Interchange to Ibadan).
Refineries gulped N81.41bn, refined zero crude – NNPC [PUNCH]
A total of N81.41bn was expended on Nigeria’s refineries between January and August this year but the facilities refined no drop of crude oil all through this period, latest data obtained from the Nigerian National Petroleum Corporation showed.
Kaduna Refining and Petrochemical Company, Port Harcourt Refining Company and Warri Refining and Petrochemical Company posted a cumulative revenue of N6.54bn during the eight-month period.
With a revenue of N6.54bn and a total expense of N81.41bn, the facilities ended up with a deficit of N78.87bn, according to figures contained in the just-released August 2020 report of the NNPC.
Further analysis of figures from the latest report, as well as those earlier released by the corporation, showed that the revenue, expense and deficit of KRPC during the period under review were N6.22bn, N33.61bn and N27.39bn respectively.
PHRC posted a revenue, expense and deficit of N61m, N25.57bn and N25.51bn respectively from January to August 2020.
Similarly, WRPC earned a revenue of N257m, incurred an expense of N22.23bn and posted a deficit of N21.98bn during the same period.
It was further gathered that for 13 straight months, the facilities had been running without refining any volume of crude oil.
Data from the consolidated refineries operations put the volume of crude processed by the facilities from August 2019 to August 2020 at zero metric tonnes.
With a cumulative plant capacity of 445,000 barrels per day, the facilities posted a capacity utilisation of zero per cent all through the 13-month period.
However, the volume of crude they recorded as closing stock between August 2019 and August this year was 3.78 million metric tonnes.
For several years, Nigeria has been importing the bulk of its refined petroleum products as a result of the inability of its refineries to refine crude oil produced within the country.
On Thursday, the Federal Government revealed that Nigeria, Africa’s biggest oil producer, was set to resume the importation of petroleum products from a neighbouring country, Niger Republic.
The Federal Ministry of Petroleum Resources said in a statement that the two countries signed a Memorandum of Understanding for petroleum products transportation and storage.
It said following bilateral agreements between the President, Major General Muhammadu Buhari (retd.), and his Nigerien counterpart, Mahamadou Issoufou, talks had been ongoing between the two countries for over four months – through the NNPC and Niger’s Societe Nigerienne De Petrole.
According to the statement, Niger Republic’s Soraz Refinery in Zinder, some 260km from the Nigerian border, had an installed refining capacity of 20,000 barrels per day.
“Niger’s total domestic requirement is about 5,000bpd, thus leaving a huge surplus of about 15,000bpd, mostly for export,” it said.
The national oil firm again explained in its latest monthly report that the declining operational performance of Nigeria’s refineries was attributable to ongoing revamping of the facilities.
It said the revamping of the facilities was expected to further enhance their capacity utilisation once completed.
Operators in the downstream oil sector as well as economists have repeatedly called for a fast revamp of Nigeria’s refineries in order to halt the continued importation of refined petroleum products.
The National President, Independent Petroleum Marketers Association of Nigeria, Chinedu Okonkwo, said, “Getting our refineries working optimally is so vital now to save us the continued depletion of our foreign exchange.
“I know the NNPC is working towards that and we hope the refineries will come onboard as soon as possible, because this might also help in reducing the cost of refined petroleum products.”
Labour stages a walkout as fuel talks collapse again [PUNCH]
The meeting between the Federal Government and the organised labour on the hikes in fuel pump price and the electricity tariff on Sunday ended in confusion as the labour leaders walked out of the parley in anger.
The dialogue which was meant to take updates on the implementation of resolutions reached during the three previous meetings ended abruptly barely 10 minutes after it commenced at the Presidential Villa banquet hall, Abuja.
The meeting had started at 8.18pm when the Trade Union Congress President, Quadri Olaleye, raised the issue of the latest hike in fuel pump price from N160 to N170.
He insisted on the reversal of the hike before the meeting can proceed.
Olaleye said, “Government is showing a high level of insincerity in discussions with us and is also putting us at risk with the people we are leading, with the masses. We find it difficult to move freely but the people in government are moving freely.
“I came to the conclusion that the major problem we have in this country is insincerity and this cannot continue.
“So, I want to put it to the government that if today’s meeting does not look promising to solve those problems, honestly, we would mobilise to walk out of the meeting. The situation is getting tense and you are putting us at risk.”
Speaking in a similar being, the Deputy President, Nigeria Labour Congress, Joe Ajaero, also said the union had been under attacks over the slow pace of implementation of resolutions reached at the meetings with the government.
But the Minister of Labour and Employment, Chris Ngige, assured that the issue would be discussed during the business session and asked the media to leave the hall.
However, as soon as journalists were out of the hall, Ngige reportedly said the issue of palliatives would be discussed first while the labour leaders insisted on discussing the fuel pump price hike.
Following the disagreement, the labour leaders angrily walked out of the meeting which had in attendance the Secretary to the Government of the Federation, Boss Mustapha, Minister of State for Petroleum, Sylva Timipre, Minister of State for Labour, Festus Keyamo and others.
Addressing journalists outside the hall, the NLC General Secretary, Emmanuel Ugboaja, said the union leaders stormed out of the session because the government team was not willing to address the latest hike in fuel pump price which he said violated the understanding they had with the FG.
He added, “We felt we should address the issue of petroleum prices before whether there is need for palliatives or not. On that strength, we felt we could not continue with the meeting whose agenda is wrongly prioritised.”
Jimoh lbrahim, NICON tackle AMCON [THE NATION]
NICON Investment and billionaire businessman Jimoh lbrahim are set to approach the court for an order quashing the interim injunction obtained by AMCON against them.
AMCON had in a statement last week said it had taken over Ibrahim’s assets over an unsettled N70 billion loan he and his companies obtained from Union bank.
It listed the assets as the building of NICON Investment Ltd at Plot 242, Muhammadu Buhari Way, Central Business District, Abuja; NICON Hotels Ltd on Plot 557, Port-Harcourt Crescent, Off Gimbiya Street, Abuja and the building of NICON Lekki Ltd also on No. 5, Customs Street, Lagos.
Others are the building of Abuja International Hotels Ltd located on No. 3, Hospital Road, Lagos; another Property on Plot 242, Muhammadu Buhari Way, Abuja; the former Allied Bank Building on Mile 2, Oshodi ExpressWay, Apapa Road, Lagos; Energy House located on No. 94, Awolowo Road, Ikoyi, Lagos; NICON Building at No. 40, Madeira Street, Maitama, Abuja; a Residential Apartment at Road 2, House A14, Victoria Garden City, Lagos; NICON Hotels Building at Plot 3, Road 3, Victoria Garden City, Lagos as well as the NICON Luxury Hotel’s Building, Garki I, FCT, Abuja.”
The Nation learnt on Sunday that both NICON Investment and Ibrahim will plead before the court that the order granting AMCON possession of the assets was not properly obtained.
They are set to contend that AMCON did not avail the court of all the facts of the dispute between them.
PDP leaders begin search for Secondus’ successor [THE NATION]
The 2023 election permutations may consume the National Working Committee (NWC) of the Peoples Democratic Party (PDP).
Some governors, ex-governors and influential leaders have started the search for a successor to National Chairman Uche Secondus.
It was learnt that some PDP governors and leaders, who are under pressure from the All Progressives Congress (APC) to defect, are bidding time over the expected leadership change before making up their minds on what steps to take.
But Secondus has told the National Executive Committee (NEC) of the party tbat his team improved the electoral fortunes of the PDP in the last three years, especially in the 2019 elections.
Apart from serving as an acting National Chairman between 2015 and 2016, Secondus assumed office on December 10, 2017.
His four-year tenure ends in December next year.
The “stress” in the party, which is fueled by 2023 aspirations, might lead to a change earlier than the exit date of the NWC.
It was learnt that those pushing for a change in PDP leadership felt the party has been weakened by the 2019 elections – the second in a row, that they were losing.
They also alleged that few governors and party leaders are dictating the pace in the party.
The same influential governors were alleged to have held PDP by the jugular such that Secondus and others are trying to create a level-playing structure in vain.
They also claimed that the party ought to start its reforms early, as the APC is doing.
They were allegedly worried that APC has been trying to make inroads into their party with more PDP leaders negotiating clandestinely with the ruling party.
A leader, who spoke in confidence, said: “It is true that APC is reaching out to more PDP leaders to defect. The return of ex-House of Representatives Speaker Yakubu Dogara to the APC has emboldened the ruling party.
“ I think they are trying to woo ex-President Goodluck Jonathan and a former President of the Senate. Some PDP leaders, who are discussing with the APC, are also waiting for the choice of the new chairman of the ruling party before their defection.
“The ex-Senate President may dump the PDP if ex-Governor Abdulaziz Yari energes the new APC national chairman.
The source added:” The PDP is muzzled at present by a few governors and leaders. Most PDP members are not happy by the state of things. These governors behave as if they own the party.
“The reality is that some governors and PDP leaders are secretly shopping for a successor to Secondus.
“They are saying if there is no leadership change, the APC may reduce the PDP to a carcass in the next one year.
A member of the PDP NEC said: “Secondus is not a sitting lame duck, he is as well forward-looking. He raised a committee headed by Governor Bala Mohammed to review the 2019 polls and what the party should do differently to win the presidency in 2023.
“Some grouses about some of our leaders are also that we have not been able to resolve crises in some states and strengthen the party in the Southwest, Northwest and in the Northeast.
“They are angry that Secondus leadership has not designed a counter-strategy to check APC incursions into PDP. It is obvious that APC, which is trying to recover from internal rumpus, is desperate to split PDP. “
Notwistanding, Secondus told NEC members last Thursday that his team had done well in three years.
He said: “When the current National Working Committee (NWC), under my watch came into office nearly three years ago, we based our programmes on 3Rs, to reposition, rebuild and to regain.
“I can confidently report to NEC that the programme is on course. We were able to reform the party ahead of the 2019 general election enough to take us to victory if the APC regime had allowed the will of the people to prevail.”
APC, PDP clash over governors’ visit to Jonathan [THE NATION]
The All Progressives Congress (APC) and the Peoples Democratic Party (PDP) are locked in a row over weekend’s visit by APC governors to former President Goodluk Jonathan, a PDP chieftain in Abuja.
While the PDP said the visit underscored an endorsement of the acceptability of the former president and the PDP, the ruling party said the opposition platform was rattled and disoriented by the visit.
PDP Publicity Secretary Kola Ologbodiyan said in a statement that the visit affirmed that “Nigeria as a nation is better under the leadership of the PDP.”
But, chiding the PDP for its reaction, APC Deputy National Publicity Secretary Yakini Nabena said PDP has lost focus.
Dr Jonathan on Friday, played host to four APC governors – Atiku Bagudu (Kebbi); Abubakar Badaru (Jigawa): Dave Umahi (Ebonyi); and National Caretaker Chairman Mai Mala Buni (Yobe), along with some party leaders.
The governors’ visit to the former president, barely 24 hours after the Ebonyi governor defected to the APC, was said to have upset the PDP leadership.
According to sources, what unnerved PDP leaders was that no APC governor had paid Jonathan a birthday visit since he lost power in 2015.
Experts: recession to hit major sectors of economy [THE NATION]
As the nation grapples with the adverse effects of its worst economic recession in more than three decades, poverty may worsen while unemployment will rise.
Food prices may gallop to the highest in recent times while the capital market may witness a slump , industry leaders and economic experts warned on Sunday.
From the manufacturing sector to financial markets, maritime, aviation, agriculture, oil and gas, household economy and others, the experts are worried about the outlook for the economy and called for concerted and focused implementation of fiscal and monetary incentives and reforms across the sectors.
The National Bureau of Statistics (NBS) at the weekend reported that Nigeria’s Gross Domestic Product (GDP) contracted by 3.62 per cent in third quarter of 2020. It was the second consecutive quarterly decline in GDP since the recession of 2016. The GDP declined by 6.1 per cent in second quarter 2020. The last time Nigeria recorded such cumulative GDP decline was in 1987, when GDP declined by 10.8 per cent.
The Lagos Chamber of Commerce & Industry (LCCI) said Nigeria is facing its worst economic situation in recent history with the double jeopardy of a stumbling economy and spiraling inflation, a perfect case of stagflation.
Director General of LCCI, Dr. Muda Yusuf, noted that the effects of the economic recession would be felt across businesses and households.
“Sales are slowing, profit margins are being eroded, production costs are escalating, unemployment is rising, poverty situation is worsening, purchasing power is weakening and there is a general social discontent. Regrettably, and as if these were not bad enough, the business community continues to grapple with policy, institutional and regulatory challenges impeding investment,” Yusuf said.
The LCCI boss added that while the reduction in the decline rate from 6.1 per cent to 3.62 per cent may suggest that the worst is over, further disruptions to economic activities can lead to aggravated effects on the economy, drawing back the recovery period.
On how to facilitate quick recovery, he said the nation needs to restore normalcy to the foreign exchange market by broadening the scope of market expression in the allocation mechanism.
According to him, the ports processes, especially the key institutions in the international trade processes need to be more investment friendly as trade is critical to recovery.
Yusuf canvassed the need to show greater commitment to the fixing of the structural issues to reduce production and operating costs for investors in the economy.
“Following the EndSARS experience, the state of internal security is beginning to impact negatively on investors’ confidence. Security presence is becoming less visible especially in the major cities. The psychological effects could adversely affect investment and economic recovery. We appreciate the setback suffered by the police as a result of the recent protests and we empathize with them. But we need to give security confidence to citizens and investors,” Yusuf said.
He also observed that incidents of kidnapping, banditry, herders-farmer clashes have not abated which have grave implications for investments.
He expressed optimism that the economy will resume growth in the first or second quarter of 2021, barring any new disruptions.
Chairman, Association of Securities Houses of Nigeria (ASHON), Chief Oyenwenchukwu Ezeagu said the economic recession could lead to huge selloffs in the nation’s capital market and further compounded the woes of the struggling private sector unless the government threads carefully with good combination of policies and committed implementation.
“The signaling import of whatever the governments do will influence the direction of the private sector actors. Either way, the capital market will continue to be the able partner for policy makers to rely to mobilize savings for channeling into projects that catalyze the ailing economy and gradually pull it out of this avoidable recession. However if we have learned nothing and continue to act as though all is well, the capital market may witness a sharp and huge sell-off which ultimately may hurt the market with the attendant erosion of the much-needed confidence in the market by not only the foreign but mostly the local investors. Nigeria’s way of managing this ugly development will determine what will ultimately become the narrative in the coming months,” Ezeagu said.
Deputy National President, Trade Union Congress (TUC), Comrade Chika Onuegbu, said Nigeria may not come out of its second recession in five years until third quarter 2021.
“Our revenue from oil, which contributes about 70 per cent, is barely enough to service Nigeria’s growing debts,” Onuegbu said, noting that price of oil may not exceed $60 per barrel by 2021.
According to him, the first step to take to pull the economy out is to tackle insecurity which has made it extremely difficult and almost impossible for people to go to their farms, and agriculture is one of the quick fixes to producing enough food to feed Nigeria’s growing population and to create jobs.
African Swine fever and the need for biosecurity measures [THE NATION]
THE African Swine Fever (ASF) every year kills millions of pigs. There is no vaccine for the disease, which is highly contagious in pigs. To stem the tide, pig farmers are being advised to take biosecurity measures.
However, research has shown that the animals that die of any disease are not fit for human consumption. And the carcasses of pigs with the fever should be buried to prevent further spread of the virus from its body fluids.
In many cases where the entire herd was wiped out, a 100 per cent mortality rate has been reported.
In Nigeria, where swine farming is becoming increasingly important to the economy and the prosperity of individual households, the effects of this can be devastating.
According to official reports from the Federal Department of Veterinary and Pest Control Services (FDVPCS), about 70 000 pigs died within three months following an outbreak of the African swine fever in February 2020, in Nigeria’s largest pig farm co-operative, Oke-Aro on the borders of Lagos and Ogun states.
In monetary terms, it was estimated that the owners lost more than N20 billion.
While many operators became apprehensive, as the disease continued to spread to other states in the country, threatening livelihoods supported in the value chain, they advocated for the need to for urgent intervention from government and partners.
What is African swine fever?
African swine fever (ASF) is a highly contagious haemorrhagic viral disease of domestic and wild pigs, which is responsible for serious economic and production losses. It is caused by a large DNA virus of the Asfarviridae family, which also infects ticks of the genus Ornithodoros.
The disease can be spread via ticks or among pigs by oral and nasal transmission. Pigs can also get infected through contamination of wounds or food.
There is a wide range of symptoms, including loss of appetite, fever, skin haemorrhages, vomiting and abortion.
Prevention and control
Following the outbreak of the disease in Nigeria earlier this year, the Food and Agriculture Organization of the United Nations (FAO) in collaboration with the Federal Ministry of Agriculture and Rural Development, through the USAID funded ‘Strengthening Global Coordination of Animal Health Emergencies of International Concerns’ Project, as part of efforts to control and prevent further spread of the disease recently empowered epidemiological officers with competencies for management and containment of the disease.
The training was conducted in two batches at the National Veterinary Research Institute (NVRI), Jos, Plateau State, were field studies were carried out.
However, pig farmers/breeders, marketers, butchers, processors, transporters, feed millers in the pig value chain, private veterinarians/animal health workers, State officials and Federal epidemiology officers were also trained on biosecurity measures.
Through the training, epidemiological officers and operators in the pig value chain from 20 States and the Federal Capital Territory (FCT) were empowered on how to manage the epizootic that was reported earlier this year. Also, field study visits and hands-on practical sessions were carried out.
Speaking on the negative effect of the disease, FAO Representative in Nigeria and ECOWAS, Fred Kafeero, while noting that ASF has no known vaccine or cure, said its continued spread in Nigeria has socio-economic and food security consequences if uncontrolled.
Kafeero, however, urged value chain operators, especially the most vulnerable actors to embrace good biosecurity measures.
“Similarly, the capacities of epidemiological officers from at-risk states because of their large pig population, need to be enhanced to ensure the disease is contained and effectively managed to prevent the continued loss of livelihoods”, Kafeero said.
Recession: More jobs to go [SUN]
As businesses and citizens continue to groan under the worst recession in history, members of the Organised Private Sector (OPS) have called for reevaluation and reassessment of government’s economic and foreign exchange (forex) policies, among others, to rejig the economy.
Both the Lagos Chamber of Commerce and Industry (LCCI) and the Nigeria Employers Consultative Association (NECA) believe that the government has vital roles to play if the economy must have a quick return-around.
The LCCI Director General, Muda Yusuf, who said the news of the recession did not come as a surprise as the economic contraction was 3.62 per cent in the third quarter as against 6.1 per cent in second quarter, however said that with these numbers, one could possibly say that the worst is over as the contraction in the third quarter was much less than what was experienced in the second quarter.
He said: “Regrettably, the #EndSARS crisis may perpetuate the recession into the fourth quarter. The protests and the destruction that followed was a major setback for our economic recovery prospects.
From an economic perspective, 2020 has been a very bad year. The worst in recent history. We are faced with the double jeopardy of a stumbling economy and spiraling inflation. The October inflation numbers of 14.23% was the highest in 10 months. In economic parlance , this condition is characterised as stagflation. The effects of these developments are evident in business and in households.”
The LCCI boss opined that, to facilitate quick recovery, government need to restore normalcy to the forex market by broadening the scope of market expression in the allocation mechanism. He added the Ports system should also be more investment friendly as trade is critical to recovery.
In the same vein, the Nigeria Employer’s Consultative Association (NECA) has called for urgent economic recovery effort.
Its Director General, Dr. Timothy Olawale, noted that “with high level of inflation and unemployment, exchange rate and other macro economic indices, there is need for urgent reevaluation and reassessment of government’s economic policies,” he said
The NECA boss said there is urgent need to increase aggregate demand in the economy as a way to spark economic activities.
He said, “Government should give more tax cut to promote business capital investment while encouraging local and foreign investment. Government should fast track the implementation of policies to diversify further its export potential, mostly the huge stock of natural and agro resources in order to reduce pressure on the foreign reserves.
“We call for more robust and comprehensive expansionary fiscal and monetary policy packages to expeditiously reflate the economy out of the current crisis.”
A Development Economist, Mr Odilim Enwegbara, described the second recession as worrisome, saying that the country may go into bankruptcy if it does not quickly exit the quagmire.
Enwegbara noted that given the unproductive economic system Nigeria runs, the frequency of the recessions would become shorter over time.
He said; “I have been saying it since 2016 that in less than five years, the country would witness another but longer recession. I have also said that if care is not taken, the country could during the second recession go into bankruptcy.”
Mr Olisa Agbakoba, a former President of the Nigerian Bar Association (NBA), gave fiscal authority tips on how to raise revenue.
According to him, “one of the good ways to realise money is to look within yourself, to see if there are assets you can dispose of. If government were to get out of a lot of things it shouldn’t be doing, it will be in a stronger position to focus on work in the economy. For me, government should take into account, the unions and privatise all the airports. Government’s best way of generating revenue is from taxes. Government is still borrowing money and putting into Ajaokuta instead of selling it. The number of businesses that government has across Nigeria can generate about N20-30 trillion.”
For the aviation sector, an expert, John Ojikutu, said government cannot keep sustaining the airlines as ‘they have always been in a recession’
He suggested that airlines should review ticket price upwards if they want to survive economic hardship.
“Does it make any economic sense to the airlines to be selling tickets to places like Abuja at a rate less than N40,000 or $100 now that dollar is N400+/$ which in 1989/90 was selling too at $100 when naira was N4/$? I often say that the business plans of the airlines from the date of the liberalisation of the industry in 1989 has serious faults and nobody, not even the Nigerian Civil Aviation Authority (NCAA) and the National Assembly (NASS) have considered it necessary to know why they have been having short lifespans. What everyone is always thinking about is how to support the airlines with public monies that are not sufficient for major social services for the greater number of the citizens.”
According to the President of Pharmaceutical Society of Nigeri (PSN), the secondrecession is not unique to Nigeria.
He, however, lamented that “the consequence to the people is that when an economy contracts, it means that total output becomes less, everything becomes expensive because price goes up.. This will further increase the level of hardship, unemployment will increase, inflation will go up, increased hardship will cause social disquiet and disruption.
“Faced with the challenge of recession, government must do something to reverse it as quickly as possible.”
Andrew Nevin, the Chief economist, of Pricewaterhouse Coopers(PwC) lamented that the second recession is very painful for the economy as more people slip into poverty and greater unemployment.
“What is required now is greater investment in the country from Nigerians at home, Dispoprans, and other investors.
“Key sectors need structural performance like the real estate, investment in infrastructure, power, ICT, agriculture. We need to continue to work on a better business environment, more coordination between the federal and state government. Focus more on state level development and engagement of the Disporans to get the funds we need.”
ASUU branches to decide fate of 8-month-old strike [SUN]
The Academic Staff Union of Universities (ASUU) has directed it various branches to hold congresses and decide the fate of the eight-month-old strike based on the new offer by the Federal Government.
Daily Sun learnt that over the weekend, ASUU asked each branch to hold congress between today and Wednesday, November 25 and that the outcome would be taken to the next meeting on Friday with representatives of government.
Last Friday, the Federal Government at the resumed negotiations with lecturers offered N65 billion to settle the Earned Academic Allowance. Government also agreed to pay additional N15 billion as revitalisation fund in an effort to end the ongoing strike. The amount was in addition to N20 billion that was being proposed.
It was learnt that if the new offer was accepted by the branches, it would shape outcome of the strike.
Zonal coordinators of ASUU Ibadan and Lagos zones, Prof. Olusiji Sowande and Prof. Ade Adejumo as well as the University of Lagos branch chairman, Dr. Dele Ashiru, confirmed the directive by the leadership of the union to the branches to hold congress and take decision on the new government offer.
Profs Adejumo and Sowande said after the congresses, their views on the new offer would be collated and taken to ASUU secretariat ahead of the Friday meeting with Minister of Labour and Employment, Dr. Chris Ngige.
Dr. Ashiru disclosed that members at the congress would make inputs into the new offer but observed that the offers would be without timelines for implementation, adding that the congress would demand specific date for payment of the outstanding salaries, release of check-off dues, payment for earned allowance and release of the revitalisation fund to the universities.
Daily Sun gathered that for the Akure zone of ASUU, the Obafemi Awolowo University, Ile-Ife would hold its congress today after the zonal meeting while the Federal University, Akure, would hold its congress on tomorrow and Federal University, Oye-Ekiti and Ekiti State University, Ado-Ekiti would meet on Wednesday.
ASUU commenced its strike on March 23 to press home the implementation of their demands, among them, the rejection of the use of Integrated Personnel and Payroll Information System (IPPIS) to pay university lecturers’ salaries and allowances, as against the ASUU-developed University Transparency and Accountability Solution (UTAS) which it proposed renegotiation of the 2009 FG/ASUU agreement and revitalisation fund for public universities.
Salami panel report: Fear grips Magu’s boys [SUN]
There is palpable fear in the camp of the embattled suspended acting chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, following last Friday’s submission of a report by Justice Ayo Salami-led Commission of Inquiry.
President Muhammadu Buhari, who received the report, had in July, set up the panel to investigate assets recovered between May 2015 and May 2020. Magu held sway between 2015 and July 2020 before his exit.
Minister of Justice and Attorney-General of the Federation (AGF), Abubakar Malami, had in a 22-point allegation against Magu titled, “Flagrant Abuse of Office and Other Infractions Against EFCC Chairman, Ibrahim Magu,” accused the embattled police commissioner of abusing his office.
Although details of the report are yet to be made public by the Presidency, Daily Sun, however, gathered that there is tension in the camp of Magu over fears that his eventual prosecution may cause trouble for them.
A top source said President Buhari may sanction the prosecution of Magu. He said the president is angry that one of his signature achievements could be rubbished by the outcome of the investigation.
He said: “When President Buhari came into office, his major plan was to tackle corruption. In fact, he was voted into office because he promised to fight corruption. He feels betrayed that his anti-graft war could be ridiculed because of the alleged happenings in the EFCC.
“Buhari has just about two years and six months to go as presient. It will be hard to change anything at this point. So, if he is bent on ensuring that those who have sabotaged him are prosecuted, he’s in order.”
He said the president had patiently waited for the report to give him the leeway to ensure that those involved in the alleged illegal disposal of recovered assets and high-ranking Nigerians who may have benefited from the purported ‘bazaar’, are brought to justice.
“There are claims that some highly-placed Nigerians in the corridors of power may have benefited from the questionable disposal of the recovered assets.
“Those people are worried right now. So, they’ll be scheming to sabotage any plans to prosecute Magu,” the source added.
Meanwhile, Magu has said he didn’t shun an invitation extended to him by the Code of Conduct Bureau (CCB). He said instead, two letters have been written to the chairman of CCB by his lawyer.