Nigeria’s Economic Recession: The back drop

One of the most popular words among Nigerians today is “Economic recession” and rightly there is no ignoring the fact that Nigeria is actually experiencing recession. From the dwindling National reserves, to the crash in oil price, down to the astronomic increase in prices of food items, it was no surprise to hear the federal government officially declare that the country is “Technically experiencing recession”.
Let’s cut to the crux of the matter, the present state of the Nigerian economy is as a result of the various economic policies of the past and present administration, and so it was only a question of when and not if we’ll begin to feel the impact of our poorly timed and ill-judged economic policies.
Oil:
which has been the main stay of the Nigerian economy has been sold on average $100 per barrel with the country boasting production of about 2.2million barrels per day, this meant that there was plenty in the country’s purse, and also blinded the government from finding alternative source of generating foreign exchange making the us a mono economic nation.
Budgets: A quick look at 2014’s budget shows a wide margin between the recurrent and capital expenditure, with recurrent non-debt spending made of salaries, overheads and oother transfers about #2.455 trillion while capital expenditure was about #1.119 trillion. For sustainable economic growth, provision for capital expenditure should be much more than recurrent expenditure. That also points out the fact that the larger chunk of the recurrent expenditure was meant to pay salaries of staffs (whose services have no direct impact on the economy, including those in the executive arm).
Corruption: The inability of the government in times past to ensure transparency and accountability has breed corruption. This invariably has made the rich richer and the poor poorer, to make it worse a lot of the stolen treasury are stashed away in foreign countries where is add no value to the Nigerian economy or worse still they are invested in buildings and other frivolities (such as cars, hotels, estates etc.) which really do not add much to the country’s GDP.
Consumption Driven Economy: Nigerians has over the last decade derived much pleasure and satisfaction in consuming finished goods and products most of which are imported, from imported toothpick to shoes to medical attention overseas to even education abroad, we basically were living on the fast lane gradually increasing our demand for dollar and depleting our foreign reserves in the quest to satisfy the undying thirst for foreign good.
Shambolic Employment: A quick look at most government ministries across the country especially in rural areas, you will find a lot of redundant staffs who are under employed. For example why keep thousands of staff in the ministry of agriculture without having them produce anything or why keep employing graduates to ministries when there are not much they could do in such ministries that would boost our GDP.
Debt: As at march 2016 Nigeria’s debt profile stood at N12.06 trillion for both external and internal debt. The question remains how did we accrue so much debt and where did all the debts go? Did it go for roads, power, refineries or infrastructure? No. They are mostly used to service and pay up our recurrent expenditure which definitely does not sustain any economy in the long run.
In conclusion current state of the Nigerian economy has been largely as a result of the carelessness and wrong policies of both past and present administration. Nevertheless with conscious effort and willingness to right the wrongs Nigeria can be better than what we ever dreamed of.
God bless Nigeria, God bless you.
Timothy Toluwani.