FG should be active enough to tackle the recession - Akpan Hogan

FG should be active enough to tackle the recession - Akpan Hogan Ekpo

By: Ayoola Imran              

Bayero University, Kano organized a convocation lecture as part of its 33rd convocation programmes. The convocation lecture was held on Friday, March 17, 2017 at the Convocation Arena of BUK, New campus.

 Malam Ahmed Joda, CFR, chaired the occasion while the speaker Prof. Akpan Hogan Ekpo (Professor of Economics and Director General, West African Institute for Financial and Economic Management, Lagos.) presented a marvellous paper titled 'The Nigerian Economy: Current Recession and Beyond.' The don stated that when the Nigerian Economy returned to Democratic rule in 1999 there was hope that better macroeconomic management would be part and parcel of governance. However, the mismanagement and lack of good governance moved the country into a wrong direction.

 Also, lack of diversification and the sharp decline in crude oil revenues crippled the economy drastically. By definition, economic recession is a phase in the business cycle defined as the periodic but irregular up-and-down movements in economic activity measured by fluctuations in the real GDP and other macroeconomic variables like unemployment and inflation. The rate of inflation rose from 9.6 per cent in 2015 to 17.9 per cent in the 3rd quarter of 2016. Inflation now stands at 18.55 percent. The -2.24 per cent growth of GDP in the 3rd quarter and -1.30 per cent in the 4th quarter of 2016 confirmed that the economy was deeply in a recession. For the year 2016, the economy contracted by -1.51 percent. 

Akpan further mentioned some factors responsible for the current recession. These include: a) poor governance and poor economic planning b) lack of diversification and the slump in oil prices c) weak manufacturing sector with heavy dependence on imported inputs d) low agricultural outputs e) weak foreign direct investment f) high inflation rate g) high interest rate h) lag structure i) political cycles - increased expenditures during elections thus worsening the fiscal position of the economy j) conflict of policy k) primitive capitalist accumulation of a special type- unprecedented looting of the common wealth; monies which could have been used to develop the economy are stashed away in foreign banks, soak aways, farms etc. 

Having said that, he equally suggested measures that will get us out of the recessions. They are as follows: a) counter-cyclical spending and investment which includes: a) higher spending on agriculture and manufacturing seeking to boost local production b) facilitate teaching in skills acquisition for enhanced entrepreneurship c) promote diversification of the economy d) invest in hard infrastructure particularly power, roads, railways and housing b) Recurrent Expenditure - in a recession, recurrent expenditure, mostly personnel cost, would stimulate aggregate demand. Sub- national governments owe salaries and allowances to workers; the sooner these workers are paid, the better for the economy. Some tutors contributed towards the discussion of the above topic. Prof. Sule Dankano lamented bitterly on the failure of the Nigerian leaders since 1999, to respect the constitution and act upon it. 

Another tutor urged the Economists to set up a forum that will be vocal enough and stand against any improper economy policy introduce by the government. This move will put those in government on the right track. Prof. Akpan concluded that he didn't presents his paper to reply questions but rather to provoke discussion and debate. The reporter of this piece implore the federal government as a matter of urgent to go through the copy of Prof. Akpan lecture that was presented in BUK for effective implementation.

Ayoola Imran, live from BUK Convocation Arena, for www.themedia.com.ng