A BBC headline reported on the 31st of August, 2016 reads, ‘Nigeria slips into recession’. This caption confirms one of the dreaded fears for many Nigerians in the year 2016. Although, the government affirms that even though oil prices have dropped globally, other sectors are barely affected by the situation of the economy. Yet ironically, crude oil accounts for more than 70% of the Nigeria’s foreign earning. This raises debates on how much government has invested in other sectors including agriculture in other to make up for the losses incurred from the struggling oil sector.
Coupled with the crash in oil prices, the fall of the Nigerian Naira has also affected the growth of the economy with the inflation rate reaching an 11year high esteemed to be highest since October 2005 which is according to the median Bloomberg estimate. In addition to this, the Central Bank of Nigeria recorded that consumer prices increased from 17.9% to 18.3% between September and October 2016.
The reality of the situation besides the figures as seen from the layman’s perspective is that, ‘the country is dry’, inferring that unlike previous years 2016 so far has been the most challenging year yet. This period has also experienced an increase in unemployment as many companies have resulted to entrenchment of staff and/or slashing salaries in order to keep afloat. Figures from the National Bureau of Statistics (NBS) state that in the last one year, over 4.8 million people cutting across different sectors have lost their jobs consequently. The case is similar for business owners much of whom have resulted to closing down from not being able to weather the economic storm. Many have also resorted to investing in quick money schemes best referred to as ‘Ponzi schemes’ with MMM and Ultimatecyler being the widely spread of such schemes.
However, despite controversial statistics, public fears and raise hopes, the real question we are compelled to ask is what is or are the solution(s) to the issues surrounding the Nigerian economy; which in the last one year has dropped from first place as the fastest growing economy in the African continent. No doubt the solutions can only be found from looking inward. The Minister of Finance, Kemi Adeosun has claimed that the country would come out of recession based on certain policies and structures the Federal government is currently establishing in order to revive the economy. For Adeosun, the best approach to dealing with the situation is by investment in local infrastructure. This also involves investment in other sectors of the economy such as agriculture and other mineral resources.
Taking a cue from the US experience of the Great Recession, the America we see and now love today was born out of a dark place. Through construction of national infrastructures such as roads, hospitals, bridges and the likes, the American government provided jobs opportunities for millions of her citizens involved in all aspects of building and replenish broken or non-existent structures. Revenue received from the use of such infrastructure was then put back into building the economy.
Evidently, attempting to redeem the economy from its current situation would imply the active involvement of not just the government, but the entire citizenry (Watch The Men Who Built America). It is also important to consider an internal solution to the state of the economy. The government should endeavor to partner with small business owners. Not only would this inspire new and innovative ideas, it will also create a platform for the country to showcase their products to the world. In addition to this, we should focus on improving local content to be sent out to other parts of the world. Furthermore, since agriculture accounts for about 20% of foreign earnings, the government should also focus on empowering local farmers, and making grants available for them to expand their production. This would not only affect their methods of production, but will also increase the amount of food and cash crops harvested per season. The overall outcome of this will be, while creating opportunities for individuals to get involved in farming, the government is not only tackling the issue of unemployment but increasing the quality and quantity of foreign export.
Conclusively, in the coming years, the aspirations of many Nigerians is that government plans targeted at reviving the economy would yield maximally. Amidst mixed emotions the light at the end of the tunnel for countries that have experienced recessions is that the economy comes out stronger and is more sustainable.
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