News
Experts Seek Effective Fiscal-Monetary Policy To Tackle Recession
Some economists in the North-East have urged the Federal Government to formulate effective fiscal and monetary policies to prevent Nigeria from sliding into recession.
The experts including academics and financial analysts said the measure was imperative towards building a vibrant economy and sustain the gains recorded in the agriculture sector which enabled the country to withstand current global recession.
The experts spoke while responding to a survey by The Tide source on global economic recession in Bauchi, Damaturu, Gombe, Maiduguri and Yola.
Recession is a period of persistent economic downturn or low level of productivity.
Dr Binta Yahaya, an economist in Damaturu, Yobe, said several factors indicated that the world is sliding into recession.
She said, “in the UK and the U.S., rapid decline in productivity and high inflation rates have been reported.
“In Nigeria, there is too much money in circulation with low productivity level.
“Inflation is characterised by low per capita Gross Domestic Product (GDP). The GDP drops for two consecutive quarters and may last for about 10 months”.
She suggested that fiscal and monetary policies which might not have immediate benefits must be formulated to control recession.
The expert said such policies and plans must envisage natural disasters such as floods and pandemics, adding that over reliance on importation must be checked.
Yahaya noted that failure to properly manage recession would lead to low wages, high unemployment rate and borrowing.
“If you look at the current debt profile and ratio in the country, it is alarming and can lead to more recessions in the future,” she warned.
Yahaya, however, noted that all economies experience recession from time to time, but what matters is the ability to adapt through effective plans and policies.
Prof. Ibrahim Hassan, Department of Economics, Modibbo Adama University (MAU), said the Russia-Ukraine war subjected many countries to recession.
According to him, the disruption in the global food and energy supply chain, low production and the loss of investors’ confidence exposed many economies to recession.
He noted that investors were withdrawing their potfolios due to the crisis which negatively affected world economy.
“In this country; we are battling with inflation which has to do with dwindling oil revenue and lack of stable prices in the international oil market.
“Presently; there is crisis in currency market and it is responsible for the hike in prices of food commodities,” he said, stressing that proactive measures are necessary to guard against plunging the country into recession.
He urged government to improve oil and energy supply to meet increasing demands, encourage productivity and boost its revenue base.
Also, Jorome Jaimu, a lecturer, Department of Economies, Adamawa State Polytechnic, Yola, said the redesigning of the Naira note would affect the economy and escalate pressure on the Foreign Exchange (FOREX) in the country.
“This will not be good for the economy of the country at the moment.
“However, people are bringing out hoarded Naira notes printed since 2015. So, in other away it is going to help the economy,”
Similarly, Alhaji Babagana, a Senior Lecturer, Borno State University, Maiduguri, opined that insecurity and oil vandalism posed serious threat to sustainable economic growth in the country.
The trend, he said, resulted to comatose economy and investment constrained, low productivity unemployment and poverty.
The don listed inflation; rising energy costs, FOREX scarcity, and Naira depreciation as factors bleeding the Nigerian economy.
In the same vein, Mr Usman Dutse, Dean, School of Business, Federal Polytechnic, Bauchi, said the trend exposed Nigeria’s economy to frigile condition as major economic indicators showed negative signs.
“Unemployment rate has increased to about 33.3 per cent and inflationary rate 20.7 per cent with N41 trillion debt profile.
“Poverty level has increased between 43 and 46 per cent and Naira is trading N850 to a dollar at parallel market.
“The cost of living has gone up and cost of production is also high,” he said.
To salvage the situation, Dutse advocated a consistent economic policies, reforms and plans by the government.
“All these things are happening because of the persistent neglect or lack of consistency in implementation of policies.
“There should be serious reform and attitudinal change from individuals, organisations and government agencies,” he said.
Corroborating the stance, Dr Mustapha Kabara, a Lecturer, Department of Economics and Development Studies, Federal University Kashere (FUK), Gombe, advocated austerity measures to cut domestic spending and ensure policy continuity to avert recession in the country.
This, he said, are part of the short term measures to improve the economy by ensuring effective control of the government’s spending.
According to him, with the dwindling income as a result of the different factors affecting oil production, it became imperative for the government to take adequate financial measures to avert recession.
“It is also imperative for the government to ensure harmonisation of fiscal and monetary policies.
“Unfortunately, what we have is a vibrant and strong monetary policy but the fiscal policy is not working.
“Government should come up with a good synergy between monetary and fiscal policy so that the policy will be able to touch positively the demand and the supply side,” he said.
In the long run, Kabara said as the country prepares for election, it was desirable to ensure continuation of good policies of the incumbent administration for sustainable social and economic development.
“Inherited policy that are good can be fine-tune but not to be discarded as creating new ones is not healthy for the country, especially in an emerging economy like ours”.
He, therefore, suggested implementation of consistent policies, reforms and plans by the government.
For his part, Dr Abdulmajid Jamal, observed that Nigeria is moving towards self sustained economy in terms of food production.
According to him, with the country moving towards self-sufficiency in food production, it wasn’t going into recession anytime soon.
Jamal, who is a Chief Lecturer, Economic Department, School of General Studies, Abubakar Tatari Ali Polytechnic (ATAP), Bauchi, decried heavy dependence of the country on importation of many items.
He said: “We are lucky becasue food is excluded from our importation. In most cases, we only import few things in food items.
“The major import that consumes our money was rice and now the economy is producing enough for local consumption. The import is far less even though it’s through smuggling.
“So, the country is moving towards self sustained economy in terms of food production but in terms of other things, we are not.
“We are moving towards food sufficiency but if care is not taken, we will lose that because the farmers are now heavily in use of herbicides, insecticides and chemicals”.
He noted that heavy application of chemicals would deteriorate soil fertility and make it barren not to produce effectively.
The practice, he said, contributed to global warming, devastating effects on the ecosystem and low production output.
He further attributed the inflation in the country to importation of raw materials for manufacturing industries due to high FOREX.
The Minister of Industry, Trade and Investment, Dr Doris Uzoka-Anite, has affirmed that Nigeria now has the capacity and materials to manufacture Made-In-Nigeria cars for local use and export.
With the enabling environment being provided by the government, she said manufacturers should be held responsible if the cars are not rolling out by December 2024.
Currently, Nigeria produces less than 10 per cent of the vehicles used in the country.
Last year, Nigeria’s vehicle assembling industry, estimated to be worth around N302billion, tanked to a new low due to increasing production costs and weakened demand for locally assembled automobiles.
According to the Manufacturers CEOs Confidence Index, activities of motor vehicles and miscellaneous assembly deteriorated further below the benchmark (50 points) from 48.6 to 46.7 points.
But speaking at the Automotive Component Manufacturers meeting in Abuja, she noted that the automobile industry is faced with both challenges and opportunities.
A statement issued last Friday by the Director of Information and Public Relations, Adebayo Thomas, said, “In a significant move aimed at fostering sustainable growth and development in Nigeria’s automobile industry, the Federal Government has issued a clarion call to all stakeholders, including manufacturers, dealers, regulatory bodies, and other players in the automobile ecosystem.
“The call comes as part of a broader strategy to enhance the sector’s contribution to the nation’s economy.”
Encouraging the stakeholders to key into the Nigerian Automotive Development Policy, the Minister said, “As far as we are concerned, the auto industry is now set to go.
“We are counting on all stakeholders to make that happen. If we do not produce made-in-Nigeria cars before the end of this year (December), it will be your fault, because I am sitting down here giving you all the assurances that this administration has created the enabling environment to make sure that the auto policy kicks off.”
Anite emphasised the need for collaboration among manufacturers, dealers, regulatory bodies, and other players in the automobile ecosystem, saying by working together, they can address challenges, streamline processes, and drive innovation.
She also urged stakeholders to maintain high-quality standards across the board, including vehicle manufacturing, safety features, emissions control, and after-sales services.
Stringent adherence to quality, she said, will boost consumer confidence and attract investment.
The minister assured all that the government would continue to encourage increased investment in research and development, adding that, innovations in electric vehicles, fuel efficiency, and alternative energy sources are critical for long-term sustainability.
On local content, she also emphasised the importance of promoting local content by sourcing materials and components locally.
By doing this, she said, the sector can create jobs, reduce import dependency, and contribute to economic diversification
In his introductory comments, the ministry’s Permanent Secretary, Nura Rimi, emphasised the significance of team action and shared vision as outlined in the Nigerian Automotive Development Policy.
He also urged stakeholders that the country “will overcome obstacles and unleash the full potential of Nigeria’s automotive component sector.”
He encouraged NADDC and other stakeholders to use the chance to form alliances, explore new areas of collaboration, and devise ways to catapult the automotive components manufacturing industry to new heights of success.
The statement added, “The government’s charge underscores the pivotal role stakeholders play in shaping its trajectory. Their commitment to sustainable practices will drive Nigeria’s automotive sector towards a brighter and more prosperous future.
“Environmental Responsibility: Stakeholders are reminded of their environmental responsibilities. Sustainable practices, recycling, and eco-friendly manufacturing processes are essential for a greener future.”
The Association of Professional Women Engineers of Nigeria (APWEN), Lagos Chapter, has called on President Bola Tinubu to exempt the importation of electronic components from taxation for inventive engineers.
Chairman of APWEN, Ms Atinuke Owolabi, said this a in statement yesterday in Lagos, in commenration of the 2024 World Creativity and Innovation Day, with the theme: “Step Out and Innovate”.
The Tide source reports that World Creativity and Innovation Day is a global UN Day, celebrated on April 21, to raise awareness about the importance of creativity and innovation in problem solving.
This is with respect to advancing the United Nations’ sustainable development goals, also known as the global goal.
Owolabi explained that such a measure would significantly enhance technological progress, support local innovators, and elevate Nigeria as a leading hub for innovation globally.
She stated that in a world marked by dynamic challenges and unprecedented opportunities, creativity and innovation stand as the driving forces behind progress and transformation.
According to her, women engineers recognise the critical role that innovation plays in shaping our societies and driving sustainable development.
”On this occasion, we affirm our commitment to fostering a culture of creativity and innovation within our organisation and the broader engineering community.
”Together, let us step out, innovate, and inspire the next generation of women engineers to reach even greater heights of achievement and impact.
”We believe that by stepping out of our comfort zones and embracing new ideas, technologies, and approaches, we can unlock innovative solutions to the complex challenges facing our world today,” she said.
According to her, the theme: ‘step out and innovate’, serves as a call to action for women engineers everywhere to break barriers, challenge conventions.
She noted that it would also pioneer groundbreaking solutions that would propel them toward a brighter and more sustainable future.
Owolabi disclosed that in celebration of the World Creativity Day, APWEN Lagos had inaugurated an artificial intelligence club tailored for female engineering students and young engineers.
She said that the proactive initiative aimed to inspire and equip young engineers with cutting-edge technological insights.
Th chairman said, “Additionally, we already have a 200-capacity hall to set up a resource, technology, and innovation hub to empower women and girls in engineering.
”This endeavour serves as a catalyst for encouraging aspiring female engineers to embrace innovation and stay abreast of emerging trends in the field.
”APWEN Lagos stands united in its dedication to promoting diversity, inclusivity, and excellence in engineering.
“We encourage all female engineers to seize this opportunity to unleash their creativity, explore new frontiers, and make an indelible mark on the world.”
A pan-Igbo group, Ndigbo Unity Forum (NUF), has commended the Chairman of the Dangote Group, Alhaji Aliko Dangote, and his management for reducing the price of diesel from N1,600 to N,1000 per litre.
The Tide’s source reports that diesel is the major fuel used by heavy duty vehicles and generating sets to transport goods as well as run industries across the country.
The President of NUF, Mr Augustine Chukwudum, told The Tide’s source in Enugu, yesterday, that Dangote’s timely response to suffering masses of Nigerians, going through hell to get a meal a day, “is highly commendable”.
According to Chukwudum, Nigerians need to appreciate the patriotism of Dangote since what he has done will go a long way in reducing prices of goods, especially food stuff which has gone out of the reach of the poor.
He called on Nigerians, who wish and pray always for the betterment of the country, to appreciate and thank God for answering their prayer through Dangote’s move.
“It is clear that if Dangote Refinery starts fully and gets all the crude oil needed from Nigeria, the prices of petrol, kerosene and diesel will further reduce.
“We commend President Bola Tinubu for being a listening President and supporting the Dangote Group on our crude oil needs.
“We appeal to Tinubu to encourage Dangote by providing the company with crude oil at a reduced rate as we have been demanding,” he said.
Chukwudum said that this move and subsequent further reduction, would bring industries in comatose back to life, jobs created for unemployed youths and reduction in crime as well.
“We call on governors of oil-producing Anambra, Imo and Abia States to bring investors, who shall build refineries in each of the states to refine thousands of barrels of crude in commercial quantities,” he said.
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