How Can Nigeria Get Out Of Recession? - Business - Nairaland
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| How Can Nigeria Get Out Of Recession? by Akell(m): 5:34pm On Jun 08, 2017 |
A recession is perhaps rather simply a reduction in economic activities, particularly in trade and industry, it is generally accompanied by rising inflation. In my view, a focus on inflation is an ideal way to explain a recession to Nigerians. Inflation means rising prices due to a reduction in a currency’s purchasing power. Basically, as prices rise people spend more on less, this creates a knock down effect which reduces economic activity. For example, the average University student who used to visit the barber two times a month, due to having to spend more on food now visits every two months. The barber’s income is reduced so he too cuts down on his spending. The reason I’m emphasising inflation is due to an in my opinion very dangerous idea that is slowly taking root. Seriously, looking at where we find ourselves despite our “potentialities” (as our Senators keep saying), despite our culture being very respectful of elders, I think its fair to say if an economic idea comes from somebody born before the war, ignore them with extreme prejudice. This “Buy Naija to Grow the Naira” nonsense our rulers are pushing, its very dangerous. As I explained, a key factor in a thriving economy is boosting the spending power of your citizenry. The “advanced economies” achieve this by a system of credit and cheap goods. We don’t have a credit system and somehow the idea is growing that switching to more expensive (albeit patriotic) goods will work. Aside from the fact that there is a limit to “buy Naija”, I for example need to buy more games and a new laptop. A concerted switch to local goods will just make inflation worse. It will still be a case of demand outstripping supply and considering Nigeria’s productivity problems, I shudder at the thought. There really is only way to beat a recession and that is increasing economic activity. The government’s plan is sound, borrow, invest the funds in infrastructure. I would suggest a slight reduction in taxes and a massive reduction in the salaries of our politicians, they already live on our kobo, they don’t need extra millions. Also an underrated possible cause of the inflation in my view is the disparity in income among classes (economic) in Nigeria. Take for example, recently the government announced tax holidays for mining investment, suddenly our most patriotic richest man decided that coal mining is attractive. There is a massive squeeze on average Nigerians. They’re being asked to pay more taxes, their shops are being demolished e.t.c. In my view, a slight increase in luxury, property and upper income taxes is ideal. Use the funds to subsidise transport or education. Leave more cash in the hands of Nigerians likely to spend it as opposed to those likely to park it in offshore holdings or property. Or you know the damn oil prices could hit $100+ again. Seriously, what are our pastors ,here for  Not asking them to raise the dead here, merely oil prices. |
| Re: How Can Nigeria Get Out Of Recession? by MrPresident1: 6:30pm On Jun 08, 2017 |
No end of recession until Jesus comes  |
| Re: How Can Nigeria Get Out Of Recession? by Papertrail11(m): 6:51pm On Jun 08, 2017 |
reduce price of fuel to 65naira and watch recession ran away |
| Re: How Can Nigeria Get Out Of Recession? by omokab: 6:52pm On Jun 08, 2017 |
How to get out of recession or inflation need some commitment from our government. Good and timing policy is paramount in tackling inflation/recession. I first against you where you said local made goods will add to recession this is a lie. A country should be self sufficient in some certain production of goods and services if at all we know that we can't have hundred percent of total production of goods and services. The united states and other developed country still depend on some countries to get their goods and services. But import should not exceed export that's what can help our economy to grow. Government should concentrate on what we have first especially on farm product and others of our natural resources like coal. Credit facility should be encouraged to facilitate spending on agricultural commodities and mining. We should as well tackle our inflation problem with what is causing it. We are facing cost pull inflation and we should tackle it with how cost should be reduced. Power is one of those problem and foreign exchange. So, we should improve on our power generation especially to our industrial area like Lagos and ogun state.then transportation system should be improved by focusing more on rail system. And then corruption should be tackled to allow money use for what is meant for. One of those area has be addressed by reducing the number of agencies at the sea port, this also increase the total cost of goods and services. Security men should be checked on our high as they collect bribe from the motorist it also add to high cost of goods or services. Money borrowed for short term investment should not be used for long term investment vice versa. Finally our fiscal and monetary policy should adequate. |
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