Global economic recession ahead, Jimoh Ibrahim warns FG

A business mogul, Jimoh Ibrahim, has warned Nigerian government to prepare for the expected world recession, adding that whether people like it or not such will come to pass before December this year.
Ibrahim revealed that one of the leading economies in the world, America’s balance sheet “is having a deficit of about a trillion in import and China is growing heavily.
China is also coming to Africa with money.” Speaking with newsmen yesterday in Abuja, the billionaire said it is high time President Muhammadu Buhari takes his anti-corruption fight to Ministries, Department and Agencies (MDAs) and merge some federal ministries as part of preparations for what he described as unavoidable world recession.
“We don’t have to be prepared for it.
It is something that will break out anytime from now and you have to get ready.
It is good that we are predicting it now before it happens because not many people know and maybe Nigeria doesn’t know that another recession is coming.
But it is going to happen before the end of December and this recession has a very interesting phase; the phase of massive failure of government as opposed to company failure.
“During the last recession in 2008, companies went down, G-electronic, Fourth foundation, Lemor brothers and so on.
But this time around, it is going to be both government and company that will collapse.
So, the recession is coming, it is unavoidable.
America balance sheet is having a deficit of about a trillion in import and China is growing heavily and China is also coming to Africa with money.” When asked on what the government can do to prepare for the said recession, Ibrahim said: “Preparation in Nigeria depends on the system which is not just about the President.
We have being having corruption fight, but we have to take the fight to the Ministries because a lot of corruption has happened in these areas.
“EFCC is doing a very good job but maybe they will have to divide themselves into two sectors; public modal corruption and systemic modal corruption whereby no matter the small amount of corrupt you do the EFCC will investigate and invite you the way we invite the big guns which means silencing corruption in the system and the upper ones will sustain themselves in a standard that is acceptable and by the end of the day you get a level.
“When you clean up corruption at the up level and the system is still eroded in corruption then you might have to come back to fight the system again and before you finish that the upper one clean might have graduated again.” While commenting on the foreign debt record of the country, Ibrahim said: “No economy in the world has that, that is a fantastic opportunity.
That could be seen as a great news as opposed to be seen as a bad news but the problem here is where the sadness is; when Nigeria go out to say I want money they may not get it even though they have a fantastic matrix which is 20 percent GDP to debt ratio but that won’t give you money which is so sad.
“Matrix which we call GDP to revenue so the lender wants to know what is you capacity to pay back the debt and maybe it is about 8 percent.
Will you lend to someone whose capacity to pay back is about 8 percent the answer is no.
This is where the great challenge is.
Now GDP to reserve again take away 33 billion CBN reserve from 42 billion you will probably have about 10 billion or thereabout so GDP to reserve is not very promising so again for me as a lender I will not give you money if your GDP to revenue is not positive and your GDP to reserve is not interesting.
“Now if you compare UAE GDP to debt ratio is high so debt is about 146 billion dollars and two million people and GDP to revenue is about 70 percent guaranty that you can go to sleep and the money you will get back.
“So to me I think it is about matrix but the synopysis that I am looking at the doctrine level, now in the Nigerian context would you say that five of our abandoned project is worth the size of our debt? Let me name them straight away; Ajaokuta 5 billion dollar, Adeja Dam project 3.5 billion dollars, Okopia power plant was done about 1.8 billion or thereabout; these are yanks of abandoned projects.
“So how many abandoned projects do you have if I look at your economy in real sense I see about 11,980 abandoned projects out of 12,000 about 62 percent projects that have been abandoned from 1970 to the present day and it gets terrible when we miss this, it is not about doing new things and running new infrastructures.
“The real point for Nigerian context is what do you do with your abandoned projects? Are you going to borrow money to commence another abandoned project? So if you have a great number of 11,000 abandoned projects so there is a huge pop for anybody who is in government to work because even if you have no time table of your own you pick these abandoned project and you complete them once you do that unemployed will disappear, inflation will go down and then what happens your matrix will begin to go up like GDP to foreign reserve, GDP to revenue and current account balances.