In the throes of a recession

By Joseph Edgar… I have just finished reading Simon Kolawole’s piece in Thisday. As usual he simply just painted a true picture of our present predicament as a nation. He said in four points, that we did not take advantage of the robust oil earnings during the Jonathan regime, that we squandered that opportunity handing over a lame economy to the present government and much more importantly that the present government did not react very quickly to the issue, hence the final announcement that we are now ‘technically in a recession’.

For me the major wahala is not if we are in a recession or not but do we have the right kind of leadership to fight this battle at this time. The leadership in question are those at the helm of affairs in strategic establishments like the CBN, Ministry of Finance, the Debt Management Office and other such allied locations and, if we have, do they have the full support of the apex leader in executing carefully thought our initiatives that will see us wade through this turbulence.

When the CBN announced its new FX policy with fanfare, I was very cautious. The CBN working in isolation will only be working like a blind man over the place. Trying to fix the FX issue without a concomitant attempt at fixing the supply side is a luxurious walk into desolation. What that policy would only do if anything at all would be to manage the same level of fx without an increase in the supply which can only come from either a spike in oil prices or the same spike in non oil exports. I knew the policy would fail as we continue to share fx to wasteful ventures like medical tourism, foreign education,,destination weddings and other wasteful expenditure.

The real sector agriculture, manufacturing and even entertainment that have the capacity to, amongst others, provide a buffer for the sliding revenue occasioned by the dropping oil prices have not been given enough attention. The Minister of Solid Minerals to my mind, is just a time waster. He looks like he has been totally overwhelmed and should have been left in the backwaters of Ekiti to fight for his seat. This assignment has totally exposed his ineptitude and lack of understanding of what it takes to galvanize the forces and troops to bring out robust policies that would attract foreign investors despite the ever rich mineral deposits this country possess.

As long as other areas are not being opened up like we did with the telecommunications and services to attract foreign interests, the Naira will continue to receive beatings and there is nothing the CBN can do.

It will not be overnight but small baby steps have to be taken. We have been preaching this forever, the need to diversify the economy even before I was born. But the easy cheap lucre that is petro dollars and the avarice and greed that comes with it has continued to blind us and our leadership from putting in place sustainable policies that would balance the economy and open up other sources of revenue other than oil.

Now is the time .

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