The last time I checked, ‘lobotomy’ remained a
medical term that could be described as a surgical operation in which some of
the nerves in the brain are cut to address a severe mental imbalance. It isn’t
anymore news that the Nigeria’s economic status is currently undergoing a
grievous mental disorder that requires such major operation as lobotomy.
At
the moment, the Nigeria’s economic countenance is characterized by low crude
oil price, instability in the main oil-producing regions, lack of foreign
currency and monetary strengthening. Recently, the naira has been weakening
against the U.S. dollar (USD), precisely since June 2016 when the Central Bank
of Nigeria (CBN) scrapped the currency peg that had kept it at an
artificially-high value of about #198 per USD for over a year.
After the peg was removed, the currency lost
over 40% of its value against the USD and fell to #282 per USD. While the CBN
had pledged to move to a free-floating exchange regime, it tactically
intervened in the foreign exchange market some weeks after the devaluation to
keep the ravaging naira between a narrow range of 282 to 285 NGN per USD.
However, in mid-July, the apex bank withdrew its interventions, thereby causing
the naira to depreciate further. On July 28, the currency fell to a record-low
of #322 per USD, which marked a 14.2% depreciation within a month as well as
61.8% depreciation in annual terms. Since then, the naira has been fluctuating
at low levels. Right now, it’s sold at about #314 per USD and about #422 at the
parallel market.
Notwithstanding,
several analysts cum commentators were of the view that the removal of the
currency peg was long overdue. The exchange rate flexibility awakened hopes
that the shortage of hard currency and restrictions on imports, which were
partly responsible for the country’s unwholesome economic performance in the
first quarter of the fiscal year (Q1), would ease immensely. It’s noteworthy
that the onward deterioration of the naira prompted the CBN to hike interest
rates to a record high in July 2016, in an effort to tackle soaring inflation.
In spite of the various perceived remedial approaches, the economic stagnation
still lingers.
Statistics show that Nigeria’s Gross
Domestic Product (GDP) growth rate declined to 0.36% in Q1 of 2016 compared to
2.11% in Q4 of 2015. The GDP had earlier contracted to 3.86% and 2.35% in Q1
and Q2 of 2015 respectively, before rebounding to 2.84% in Q3 of 2015 and further
shrunk to 2.11% in Q4 of same year. The current decline represents the first
contraction since June 2004, signifying a twelve-year low. Similarly, the
unemployment rate climbed to 12.1% in Q1 of 2016 compared to 10.4% and 9.9% in
Q4 and Q3 of 2015 respectively. The National Bureau of Statistics (NBS) equally
stated that, as at May 2016, daily oil production reduced to 2.11 million
barrels per day (mbpd), or 0.5mbpd lower from production of 2.61mbpd in Q4 of
2015, which is not unconnected with the lingering vandalism of the oil
facilities by the Niger-Delta Avengers (NDA). This is a basic symptom of
recession.
Since Nigeria still depends on mono-economy,
it’s apparent that she would continue to suffer from an epileptic economy till
further notice. The bitter reality is that the oil price has dropped
tremendously over the globe; it’s currently sold between $40-45 per barrel as
against $145 its initial price as at Q1 of 2015. So, even if Nigeria can boast
of up to several mbpd, it will yet not solve the ongoing economic quagmire.
Needless to say that it’s high time we stopped thinking about oil toward
concentrating on other revenue sources. It’s indeed appalling that, amidst the
dwindling oil revenue, a state like Lagos still discusses discovery of more oil
wells; this alone implies that we are yet to face reality.
First;
the CBN needs to revisit the drawing board. It’s apparent that most of the
ongoing challenges in the money and capital markets are occasioned by the CBN’s
miscalculation. Every policy introduced lately by the Godwin Emefiele-led CBN
seems to have failed woefully; hence, it’s time to have a rethink. The overall
policies must be reviewed for the country’s good. I’m of the view that
single-digit interest rate is the only way out if we are truly concerned about
diversification, particularly industrialization.
Devaluation of the currency was never an
option. Such policy would only end up enriching the rich while the poor get
poorer. Any policy targeted to be one-sided, can only constitute more nuisance
than good. A genuine policy must be neutral, strict and result-oriented. The
naira deserves a currency peg or a fixed exchange rate, which guarantees
accurate long-term predictability for business planning. In addition, the
parallel market must be adequately checkmated by the apex bank toward
curtailing lapses.
It’s also time we start doing the
‘talking’. I’ve come to agree that Nigeria’s prime predicament remains, laying
much emphasis on theory, thereby relegating practical approach to the
background. In agriculture, farmers, or prospective ones, need to be
conscientized to specialize on a particular farm produce; such measure would
definitely boost productivity. And, no farmer should mix crop and livestock
farming; mixed farming may come up in the long run after we must have
actualized our primary motive. Thus, specialty must be upheld at all costs.
Governments at all levels must equally
be willing to subsidize the cost of tractors, so that, crude system of farming
would become a thing of the past. Mechanized farming is the answer. More so,
our young ones, especially the youth, ought to be integrated into agriculture,
and should be encouraged to study various agricultural disciplines in higher
institutions by showering them with innumerable incentives such as bursary and
what have you.
The
ongoing tourism mantra ought to be decentralized, or liberalized, whereby it
would become mainly a regional/zonal affair. Such measure needs to be extended
to the security sector, so that, each geo-political zone would be answerable to
their peculiar security challenges. Furthermore, it’s needless to intensify
taxation in a growing and struggling economy like Nigeria; rather, we’re bound
to concentrate on eradication of tax evasion and leakages.
We must also revive various
technical-oriented practices and institutions, that are moribund, to include
the Students Industrial Work Experience Scheme (SIWES), Teaching Practice (TP),
and technical colleges, among others. Millions of our young ones are deeply
talented and experienced in numerous industrial fields such as ICT, thus they
require an enabling environment in which they can commercialize the patents. By
so doing, foreigners would be trouping into the country to purchase our
trademarks.
But, it’s pertinent to note that, all
these would end up being a jamboree if we overlook the ongoing power
instability. I suggest, the Power, Works and Housing Ministry ought to be
disintegrated. Additionally, we must think beyond hydro-electric generation
pattern, thus other power generation sources like biomass, solar, coal, that
are abound in the country, need to be embraced; and there’s need to
decentralize the transmission grid.
Summarily, towards a successful lobotomy,
every concerned authority must endeavour to extend hand of fellowship to the
cognoscenti. Think about it!
Comr Fred Doc Nwaozor
(TheMediaAmbassador)-Researcher, Blogger, Public Affairs analyst & Civil Rights activist-
Chief Executive Director, Centre for Counselling, Research
& Career Development - Owerri
_____________________________________
frednwaozor@gmail.com
Twitter: @mediambassador
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