The mismanagement of the economy since oil prices nosedived in 2014 is overwhelmingly poor. Almost every economic problem in the country is attributed to the low crude oil price whether true or false. Crude oil accounts for less than 10% of the GDP, yet a collapse of the commodity price has managed to erode the value of Naira, spike inflation, increase unemployment, reduce electricity generation, reduce the asset quality of loans and investment, pull down the stock market and place Nigeria to the brink of a recession. This goes to show the level of vulnerability of the economy to oil price shocks.
For over a year, we have heard more excuses than solutions from the government to the extent where we will beg a foreign nation to help diversify an already diversified economy. We don't need further diversification, we need to improve productivity! Policies that do not allow trade to flourish or hinder the ease of doing business should be discontinued. Infrastructure must be developed in reality and not on paper. Capital flows from abroad must come in to augment the low domestic savings. Austerity measures must be employed to keep debt levels at a satisfactory level until an oil price recovery. The government must also develop other streams of income (apart from oil revenues) through exportation of solid minerals and full generation of tax receipts which it currently only collects about 40% of potential tax generation in the country.
Until the government begins to solve problems instead of managing crisis, the economic outlook for Nigeria will continue to be uncertain to bad. The government we voted have no right to fail in the promises they declared to the country
PS: A three day holiday in a booming economy is silly, but in our current economic crisis, three days of near zero productivity is plain madness!
Signed:
Emeka Ucheaga,
Managing Partner,
Emeka Ucheaga Advisory
.
Comments
Post a Comment