The Nigerian economy has been plagued with several challenges over the years. In spite of many, and frequently changing, fiscal, monetary and other macro-economic policies, Nigeria has not been able to harness her economic potentials for rapid economic development. While it is believed in some quarters that, the reason for the above assertion is lack of implementation of policies, others believe that it is tied to corrupt governance.
Economic confidential finding reveal that; for most economies, the objectives of monetary policy include price stability, maintenance of balance of payments equilibrium, employment creation, output growth and sustainable development.
While the objectives of monetary policy include price stability, full employment and economic growth, targets of monetary policy refer to the variables such as supply of money or bank credit, interest rates which are sought to be changed through the monetary policy instruments such as open market operation and selective credit control among others.
Meanwhile, several government leaders in Nigeria have come up with different economic policies that for them are in the interest of the people. But in all this policies none seem to have any impact on the larger society. This has been the situation that has made Nigeria to be like a country without direction in recent years.
However, the emergence of the current leadership seems to bring some relief to Nigerians. The reason for this is simple, most Nigerians perceived the brand APC to be a brand devoid of corruption giving the pedigree of the man at the helm of affairs. But this confidence of the people begins to soften since the current regime assumed power and could not reel out its economic policies with immediate effect.
Analysts said that if Nigeria can borrow a leaf from other countries, any government that claim to prepare for governance must have its economic policies in place before assuming office. Britain for example had a change in governance recently and Theresa May being the new Prime Minister hit the ground running immediately with announcing her cabinets. But it took the current administration several months before announcing its cabinet. This is one of the factors that affect the government’s ability to come up with good economic policies that will be in the interest of the people. Before now, experts had advised the president to devalue the naira but, he insisted that there will be no further devaluation of the naira. However, recently, the naira was indirectly devalued allowing the market forces to determine the fate of Nigerians.
One of its effects on the larger society is the fact that the country is officially in recession. Speaking on this development the Minister of Finance, Mrs. Kemi Adeosun, who made this disclosure while briefing the Senate recently on the state of the nation’s economy, was however emphatic that the recession was technical and would be short-lived.
Buttressing the point, her counterpart in the Ministry of Budget and National Planning, Senator Udoma Udo Udoma, who briefed State House correspondents after the 69th meeting of the National Economic Council (NEC), said the economy was “technically in recession”, adding however that it would start to grow by the end of the third quarter of 2016.
The recession, notwithstanding, Adeosun was confident that Nigeria would come out stronger in view of the policies and programmes that the government had put in place to address the downturn.
She also confirmed that fuel subsidies had been totally eliminated, adding that the petroleum products in the country were now market-driven, as the subsidy removal by the government had paved the way for healthy competition among oil marketers.
“Is Nigeria in recession? Technically, if you go into two quarters of negative growth. Technically, we are in recession but I don’t think we should dwell on definitions. I think we should really dwell on where we are going.
“I think if we are in a recession, what I will like to say is we are going to come out of it and it will be a very short one because the policies that we have will ensure that we don’t go below where we need to go and I think with what we are doing, we will begin to turn the corner by the third quarter.
“I can confirm there is no more subsidy. It is a market-driven price and indeed, one of the good things that we are now seeing is that prices have actually been coming
down.
“There is now competition between filling stations for market share which is a good thing, which means overtime, the market will continue to correct itself,” she said.
Adeosun also disclosed that Nigerians, before the removal of the subsidy, consumed 45 million litres of petrol a day, but consumption has now dropped to 26 million litres a day, a situation she said had provided the platform for the government to make reasonable savings.
“If you look at what is happening in the petroleum sector before the subsidy removal, we were subsidising around 45 million litres of fuel a day.
“Now, without subsidy, usage has dropped to 26 million litres. So what does that tell you? All the smuggling that was going out of the country based on the subsidy that we were providing has stopped. Those are real savings to the economy which we are now redirecting into essential infrastructure that will get this economy going,” she explained.
The minister also told the senators to ignore the recent projections from the International Monetary Fund (IMF) that the Nigerian economy would be vulnerable to global shocks.
According to her, IMF projections were not necessarily in tandem with reality, insisting that she remained confident in the potential of the Nigerian economy to weather the current economic crisis.
“I am not too worried about IMF projections. I will tell you why: The IMF, one of its functions is global economic surveillance. They equally issued a negative report on Britain as a result of Brexit.
Also commenting on this development, a former President of the Nigerian Bar Association, Dr. Olisa Agbakoba (SAN), said the country’s economy is in recession due to what he termed as the strict monetary policy of the President Muhammadu Buhari’s government.
Agbakoba lamented that although the government was recovering looted funds through its anti-graft war, the funds were not being pumped into developmental projects. He said the funds were being hoarded.
According to him, the government’s strict monetary policy is difficult because it is slowing down economic growth and development in the nation.
He urged the President to deregulate the forex market in order to meet the funding gap in the economy.
The Treasury Single Account, he added, was another definitive milestone, noting that the challenge was how to move from austerity to stimulus.
“Anti-corruption is yielding results as huge sums of money are being returned; the TSA has led to massive savings of over N3tn, but the question remains how do we use these milestones to stimulate the economy?” Agbakoba said.
While speaking on getting the financial services sector right, he said this would involve limiting the role of the CBN and creating a financial services agency.
In all this, analysts are of the opinion that the economic is in recession, and instead of the government to continue with putting up defence mechanism, it is important they concentrate on what will put food on the table of an average Nigeria.
