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NES Webinar on Covid-19 and the Nigerian Economy - Press Release

The Nigerian Economic Society (NES) in its Monthly Webinar series on the Nigerian economy hosted the June 2020 edition on the Theme: Covid-19 and the Nigerian Economy: Getting the Economy Back on Track – Challenges and Policy Options. The Webinar presentation was anchored by two renowned economists- Professor Akin Iwayemi, Professor of Economics, University of Ibadan and Former President, NES and Dr Muda Yusuf, Director-General, Lagos Chamber of Commerce and Industry (LCCI). The meeting witnessed a large number of audience drawn from the members of the Society, the academia, public and private sectors, the media and the general public.

Highlights from the webinar are as follows:

1. Overview of the Nigerian Economy
October 1 this year will mark Nigeria’s 60th independence anniversary. Along with the 60-year journey, key developments include:
i. military regimes interspersed with civilian interregnum
changed the narrative of the Nigerian economy
ii. a devastating three-year civil war 1967-1970 that affected
our economy adversely
iii. fortune and misfortune of earnings almost half a trillion
dollars of revenues
iv. large scale corruption and rent-seeking activities that
brought the economy to its knees
v. agitation for resource control driven by social conflict
vi. rising social and regional cleavages
vii. insecurity evident in Boko Haram and banditry
viii. COVID 19 pandemic with its highly disruptive health,
economic and social consequences. COVID 19 has created
profound changes in the way we live, work and relate with
each other.

Given the way all economies have been crippled by the COVID-19, linked to such measures as lockdowns and social distancing, getting them back on track, has become the prime issue on the national agenda globally.

Nigeria is currently facing its most challenging period since the civil war. And similar to that difficult era, to minimize the economic and social disruption, we would need insightful answers to some basic questions:

i. How do we get the COVID-19 crippled economy back on track
in ways that minimize the economic and social disruptions?
ii. What is the role of leadership and institutions in
resetting the economy?
iii. What is the way forward for Nigeria to assume a new path
of strong economic growth and social development
underpinned by sustainable generation of decent jobs and
income, rising productivity and adoption of modern and
cleaner technologies?

However, changing our economic narrative positively to a trajectory defined by rising quality of life and economic well-being will involve hard choices we should be prepared to make.

The Federal government recently articulated its plan to put the economy back on track published in the document entitled: Economic Sustainability Plan. This is commendable.

The NES webinar offers some insights on how to deal with the economic and social effects of COVID-19 and other economic menace confronting the nation.

2. COVID 19 and the Nigerian Economy: The Framing Facts and
Challenges
i. Growth is unstable and recovery from recession is slow
ii. Weak productive structure with low productivity.
iii. Infrastructure deficits
iv. Fiscal crisis
v. Public Indebtedness
vi. External account under severe pressure
vii. Inflation is high and rising
viii. High cost of funds and finance.
ix. Cost of governance is high.
x. Social Challenges - Insecurity and threat to national
cohesion
xi. Unemployment is high and rising sharply
xii. Poverty and lack on the rise
xiii. Weak external reserves, supported largely by portfolio
investments
xiv. High dependence on oil, especially for revenue and foreign
exchange earnings
xv. Weak buffers, excess crude account has practically dried
up and sovereign wealth fund
xvi. Corruption remains a major constraint
xvii. Weak governance and political accountability
xviii. Revenue and foreign exchange shocks and shocks to
businesses
xix. Emerging issues from the COVID-19 pandemic…
Before the pandemic, living a healthy and productive life
had been a challenge for the majority of Nigerians.

However, the situation has deteriorated further since COVID-19. The pandemic which triggered three crises: health, economic and social crises came with disruptive consequences.

The slow progress at suppressing the virus in Nigeria is exacerbating the gravity of the economic and social challenges as the total (in some) and partial (in some) lockdowns and the ban on inter-state (and later little ease of…) movements associated with the disease cripple a weak economy.

The triple crises, (health, economic and social), argues for a radical re-thinking regarding how to deal effectively with the situation.

Two fundamental questions come readily to mind in the search for robust strategies to reset the economy on a sustainable path of inclusive growth and development.

What will get the economy back on track and what type of track?
i. low and jobless-economic growth and development;
ii. medium economic growth and development;
iii. high and jobless-growth and development;
iv. low but inclusive growth and development;
v. high and inclusive growth and development;
vi. sustainable economic growth and development that is
climate change compliant.

The last is the desired goal where living a better, healthier and more productive life for majority of Nigerians becomes the norm.

The government has recently published the Economic Sustainability Plan with funding budget of N2.3 trillion. The last recession also resulted in the Economic Recovery and Growth Plan with little impact on the already friable economy.

3. Getting the Economy Back on Track: Some Policy Recommendations

Solving the current crisis demands adroit political and economic skills. Some important policy options include the following:
i. Incentivize efficient use of resources in production and
consumption
ii. Enhancing agricultural productivity and sustainable value
creation
iii. Promotion of increased domestic value-added along the
value chain for natural resources.
iv. Retooling of the manufacturing sector for better
performance
v. Integrate SME’s with the rest of the industrial sector
with focus on raising productivity level based on science
and technology
vi. Sound macroeconomic management alignment of fiscal and
monetary policies
vii. Institutional strengthening
viii. Review of trade and exchange rate policy to encourage
efficiency in production and trade
ix. Adequate finance to fund investment in high productivity-
driven production activities
x. Including the excluded through social protection
xi. Establishment of economically efficient domestic economy
that is driven by competitive and comparative advantages.
xii. Transformation of domestic endowment of natural resources
and imported inputs into sustainable wealth and job
creation that is widely shared and leads to an improvement
in the quality of life of the average population.
xiii. Wider access to energy through decentralized energy
systems, including renewables
xiv. Build up Sovereign Wealth Fund (SWF) and other fiscal
buffers
xv. Reverse the declining education and health standards
xvi. Significant improvement in the security of life and
property
xvii. Reform of fiscal federalism and prudent use of the pension
funds
xviii. Reduction in the cost of governance through constitutional
amendments
xix. Prevent predatory monopolistic practises
xx. Accountability and Transparency in governance
xxi. Greater collaboration and partnership between Government -
industry on the one hand and research institutes,
universities, polytechnics on the other - The Triple Helix
xxii. Incentivise investment in science and technology
xxiii. Invest more in research and teaching advancement
initiatives with the aim of closing the skills and
competency gaps through regular upgrading of research and
teaching skills, and driven by linkages with top
universities in Europe, North America and Asia
xxiv. Promote innovative approaches to infrastructure
development and financing.

What is desirable in overcoming this pandemic and its consequences is synergy among different stakeholders underpinned by the politics of convergence such that in rebooting the economy via various economic and social measures, the clear focus is how to generate new jobs, restore lost jobs with increasingly higher productivity and cleaner technologies that advance climate change mitigation goals.

4. Concluding Remarks

The evidences before us are defined in part by the challenges associated with COVID-19 pandemic. These challenges however present opportunities to prepare for the new economic normal that would be characterized by extensive job creation, inclusive and green economic growth driven by cleaner technologies with low carbon footprint in an increasingly digitalized world.

The future prospect of a more prosperous Nigerian economy requires a paradigm change in the relationship between the leaders and the followers in order to eliminate the prisoner’s dilemma nature of social sub-optima all around us.

Signed!
Professor Sarah Anyanwu
President, Nigerian Economic Society
June 30, 2020, Abuja, Nigeria.

Posted in News by Admin
Fri, July 03, 2020

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