Notwithstanding some dissenting views, the warning issued by the Chairman of Nigeria Governors Forum (NGF) and Governor of Zamfara
state, Abdulaziz Yari, to the effect that Nigeria could be heading into
another round of recession, should rattle the managers of the nation’s economy.
Managers of Nigeria’s economy, particularly governors,
should be wary of their profligate and ostentatious lifestyle, which are
impacting negatively in their ability to pay workers’ salaries and meet other obligations of governance.
Speaking at the opening ceremony of the induction programme for newly-elected and returning governors put together by NGF Secretariat,
at the State House Conference Center, Abuja, Yari warned incoming governors to be prepared for the possibility of another cycle of recession
by the mid-2020 to third quarter of 2021.
Nigeria had officially entered a recession for the first time in more than two decades, in August 2016, according to figures which showed that the
economy had contracted for a second consecutive quarter.
Yari said the outgoing governors have agreed that borrowing is never a reliable alternative to solving economic problems and has urged
the incoming ones and other ties of government to multiply revenue
generation bases so as to change the course of doing government business for the betterment of the people.
“On our part, we made a lot of achievements in infrastructural development and provision of social services because we enjoyed a
relatively high oil price of about $100 to $114 per barrel between 2001
and the middle of 2014.
“However, by the mid-2014, the price of crude oil, which is sadly themain driving force of government’s expenditure, dropped to $75 per
barrel. It, therefore, became very difficult for many states to even pay salaries of their workers.
“This scenario is a wake-up call for all of you to come amply prepared to face these kinds of challenges, especially since we are expecting the
possibility of another cycle of recession by mid-2020 and which may last
up to third quarter of 2021.
Your good spirit of stewardship will make you contain the situation should there be one. Also, as members of the National Economic
Council, you must work hand in hand to boost the economy in tandem
with the global best practices.
“Experience, they say, is the best teacher. Ours has been a challenging
experience of managing state economies that are totally dependency on accruals from the federation account rather than exploring viable
alternatives to run the economy.
For most of the states, internally generated revenues are nothing to write home about. You must, therefore, look inward by boosting your
revenue generation base and also utilise them effectively for execution of
projects that would touch the lives of your people”.
While stressing the importance of seeking reliable alternative funding away from the federation account, the NGF chairman noted that the
NGF and the National Economic Council led by Vice President Yemi Osinbajo have agreed that “borrowing is never a reliable alternative to
solving our economic problems.
We must work hard among all the tiers of government to multiply our revenue generation bases so that together we change the course of doing
government business for the betterment of our people.
He urged the incoming governors to strengthen tax laws to encourage Nigerians to pay their taxes. According to him, “it is unfortunate that
our people have a very negative attitude to payment of taxes in full, including corporate agencies.
“If the necessary measures are put in place to provide a working system, I am certain that at the end of the day, we are going to succeed
in tackling unemployment, reducing poverty, ensuring food security and disease control as well as building a nation with a robust economy.”
But the Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI) disagreed with Yari on the
looming recession that he predicted. They questioned the basis of Yari’s prediction that the country might go into another cycle of recession
from 2020 to mid-2021.
The MAN President, Mansur Ahmed, said, “I don’t know from which position he is speaking, whether he is an economist. Although the
economy is not growing as fast as we hope, it is growing nonetheless and all the projections from the World Bank and other international bodies
say that it will keep growing. Unless something out of the ordinary
happens, I do not foresee another recession.”
On his part, the Director General, LCCI, Mr Muda Yusuf, said he could not agree with Yari because he was not speaking in the capacity of
an economist and did not put parameters forward to back his projections.
He said, “For anybody to make such a statement there must be parameters. The biggest driver of Nigeria’s economic performance is an
external factor, which is the oil price and unless Yari has information that there is going to be a major drop in the price of oil, then I do not agree
with his projection”.
It is doubtless that Nigeria’s economy, which exited recession in 2017, is being threatened by weak economic fundamentals which must be
addressed to avert a possible relapse into recession. Consequently, we align with Yari’s red alert, particularly as it affects governors who have
over the years demonstrated a penchant for corruption and profligacy to
the detriment of workers and the generality of the people they govern.