Nigerian economy, like many other countries of the world, has been hit by the Covid-19 pandemic. The country had to declare total lockdown for several weeks to halt the spread of the disease before it finally settled for gradual reopening of the economy in phases. Sadly, the longest period with which the economy was shutdown, poverty and unemployment worsened, while inflation rose exponentially.
The Minister of Finance, Zainab Ahmed, expressed fear that the country might go into recession. She stated this during the recent National Economy Council (NEC) meeting NEC presided over by Vice-President Yemi Osinbanjo. The minister said the country’s economy has contracted by 4.4 per cent and government is doing everything possible to re-absorb the shock arising from the crash of crude oil prices as a result of global coronavirus outbreak.
Due to the fall of revenue, political office holders have started cutting their salaries and allowances. For instance, Kano state government has reduced the salary of political officers by 50 per cent while Enugu state has abolished allowances for their former governors and deputies. In Kaduna state, Governor Nasir El-Rufai has directed the deduction of 25 per cent from the salary of its personnnel which began in April. In addition to these measures, both federal and state governments have reviewed their 2020 budgets to reflect the new economic realities.
During its first tenure in office, the President Muhammadu Buhari administration faced recession that lasted for the first quarter and up to the end of the second quarter of 2015. The double edged sword recession affected cash flow and abruptly slowed the level of development in the country.
Many states struggled to meet with their financial obligations. The federal government had to quickly intervene to save the cash starved states from imminent financial embarrassment. This was done through dishing out of financial bail out to states which were in financial distress and could not pay salaries.
However, the government’s prompt economic stimulus packages or response assisted tremendously towards salvaging our battered economy. While there is a difference between what had caused recession in 2015 and the current one, they share the same pattern of solutions depending on how the government reacts.
The government fashioned out several policies which, among others, was the implementation of Integrated Personal Payroll System (IPPS) to weed out the cases of ghost workers that were rampant and enriched few corrupt civil servants.
Amidst the dwindling revenues and recession staring the country in face, the federal government should tap from the report of Steven Orosanye’s committee on rationalisation of public service which centred on streamlining institutions and agencies.
The committee suggested the merger of some institutions or agencies that have over-lapping functions to save the cost of running our bureaucracy. Although, the report has been kept in the shelves for many years, the present administration has shown interest to implement it to the logical end. I think, there is no better time than now, bearing the fact that any moment the recession may strike.
Merging of agencies with similar functions is the best way to cut or reduce the cost of governance in the country. Besides, the government should reduce the salaries and allowances of political office holders, block revenue leakages and diversify the economy. The reliance on crude oil as the main source of revenue has proven unrealistic and costly error.
Ibrahim Mustapha,
Pambegua, Kaduna state
08169056963.
