Recession: the Flipside of the Story -By Shola Oshunkeye

Filed under: Economic Issues |

Shola Oshunkeye


The biggest news out of Nigeria, last week, was that of the national economy regaining strength and making a dramatic rebound. The news did not shock economic experts because the development is in sync with forecasts that the ‘miracle’ would happen in the third quarter of 2017. The International Monetary Fund (IMF) had, way back, predicted that the second biggest economy in Africa would be out of the woods at this time. Mr. Godwin Emefiele, the 10th indigenous governor of Central Bank of Nigeria (CBN) concurred with this. Both prediction and concurrence were based on available statistics. The only snag is that economic data, sometimes, do not mirror reality.

Since mid-2004, the Nigerian economy had been suffering its biggest battering ever through the plummeting price of crude oil in the international market and drastic reduction in output; a problem compounded by endless militancy in the Niger Delta. Oil, you may recall, accounts for 90 percent of Nigeria’s export earnings and 70 percent of accruable revenues. It’s price crashed from an all-time high of almost $100 per barrel to a phenomenal low of $27 per barrel. The problems, coupled with endemic corruption in the sector, amongst other issues, sent the economy into coma in August 2016. It remained comatose for five consecutive quarters.

But that was until last Tuesday, when the National Bureau of Statistics (NBS) told Nigerians that the worst was over. They said the country had come out of its worst economic recession in over 20 years. Delivering the heart-warming news, the NBS said the economy recorded 0.55 percent growth in the second quarter of 2017. The recovery, the organisation expatiated, was propelled by the impressive performance of the oil, agriculture, manufacturing and trade sectors.

Financial experts applauded the development, and urged government to do more of whatever it was doing to sustain the momentum. Specifically, they recommended greater diversification of the economy, innovation, technological advancement, sustained war against corruption, ploughing recovered loot into productive use, and other such policies that would buoy the confidence of the investing public in the economy. Since the announcement, there have been great rejoicing and lots of chest-thumbing in government. Eureka! We found it! The Muhammadu Buhari administration and the All Progressives Congress (APC) have been shouting on rooftops.

Conversely, the opposition People’s Democratic Party (PDP) has not disappointed its base. The party and its czars have not only scorned the announcement, they have also been reeling in sardonic grin, making all sorts of spins. The party and its alternate spokesperson, Ayodele Fayose, the loquacious governor of Ekiti State, insisted that nothing has changed in the personal economies of majority of Nigerians between the first quarter of 2016, when the national economy slumped and contracted by 2.06 percent, and last Tuesday, when the NBS declared the death of recession.

The-death-of-recession declaration may be good news to the politicians and the top one percent of Nigerians whose private economies boomed when oil prices soared to unprecedented levels. But not so for the remaining 99 percent who knew no boom and whose finances plummeted despite “bloated foreign reserves and reasonable exchange rate”, as the Financial Derivatives Company Limited, stated in its August 2017 Economic Bulletin.

Indeed, the NBS report elicited no wild celebration or ovation among common Nigerians who have perfected the art of patience in extreme misery, and whose happiness primarily derives from faith. For this very weak majority who, daily, fly on the wings of hope, hoping against hope even when doing so may seem like foolishness, the NBS announcement seems like a fable. To this category of people, the only evidence of an economy out of recession is in the altered sizes of their pockets, the richness and regularity of food on their table, how well they can feed their families, and the general state of their financial health. As long as they can comfortable accomplish these, the economy has been truly revamped.

But to workers whose monthly pay of N18,000 (minimum wage) still can’t take home, whose monthly pay is barely enough to buy a bag of imported rice and for whom ofada rice is a no-go area, any talk about the economy bouncing back is gibberish. Indeed, to a low-income earner to whom buying a tuber of yam at N600 and a small measure of beans (a De Rica tin size) at N350 is a big struggle, any talk about the economy being on the rebound is balderdash.

There are also the artisans-the battery charger, the welder, electrical and electronic technician, etc., who have been forced out of business by epileptic power supply. There are those who have long abandoned their workshops and become danfos drivers or okada operators. To such out-of-business professionals, the out-of-recession tale is a fable told by politicians for political expediency. To them, recession is still a present reality.

I have heard experts say that the state of a country’s infrastructure is a strong indicator of the health of its economy. They say infrastructure are a perfect gauge to measure if an economy is in good health or is gasping for breath. I cannot agree more. Take power, for instance. Before the economy nose-dived into recession, last year, Mr. Babatunde Fashola, minister for Power, had released a road map hinged on an incremental power policy. The policy aims at a phased increase of power supply to Nigerian homes and businesses over a period of time.

While making the policy public, Mr. Fashola, a Senior Advocate of Nigeria, also recalled that Nigeria had never generated beyond 5,074 megawatts since the establishment, in 1950, of the Electricity Corporation of Nigeria (ECN), the predecessor of NEPA and PHCN. And that ‘landmark’ achievement was recorded in February 2016, the month of his declaration, by the Buhari Administration.

Well, I have no problem with that. It’s just that despite the progress he claimed the government has made/is still making through its power policy, most of Nigeria is still in darkness. Many communities have not seen light for weeks on end. In my part of Lagos, we did not see light for three solid days, and nobody informed us of any major breakdown. In fact, the power situation in the country is so bad that most families now spend more on fuelling generators than stocking their stores with food stuff. To most businesses, as well as homes, NEPA or PHCN is back-up; generators are the main thing.

To understand the correlation between darkness and the upsurge in crime, fly into Lagos at night. What stares you in the face below is a sprawling mass of darkness. Contrast that to Accra, or Abidjan or Dakar or Nairobi or Johannesburg. Peer from your plane over any of these cities at night and marvel at their dazzling array of lights; lights that woo you with their magnificent luminance. Then, you will appreciate the hell it is living with erratic power supply.

Take for another example, Nigeria’s dilapidated roads. Many people have died who didn’t have to because of the deplorable condition of the road network across the country. Families who have lost loved ones in the avoidable carnage on our roads would definitely scoff at the pronouncement by the NBS. To many accident victims whose fate is hanging in the balance in hospitals, and sorrowing families still mourning lost loved ones, this economy is hundreds of thousands of kilometres away from recovery.

What about the many babies and mothers who have died in labour rooms in hospitals that are bereft of modern medical technology and lacking in modern diagnostic system; hospitals in chronic shortage of life-saving drugs; hospitals that offer little or no incentive to its personnel? In fact, hospitals that are worse than the ‘consulting clinics’ that President Muhammadu Buhari saw during his first coming as military head of state on December 31, 1983. To the families of such unfortunate patients, last Tuesday’s declaration offered little to cheer.

These are reality. They are the alternative facts. They are the flip side of the story. They are facts the NBS conveniently forgot to capture in its declaration. And they are verifiable.

To make the-economy-is-out-of-recession story really credible and truly meaningful to Nigerians, government must make deliberate efforts to empower them and make life worth living for them. It must rehabilitate family economies, healthcare system, infrastructure, power, energy and public utilities, etc. People must have money in their pockets and food on their tables. They must have opportunities to actualise their dreams and aspirations. Their children must have good education, and vulnerable members of their families well taken care of. In total, they must not only radiate life, they must also enjoy life in abundance.

These are some of the things that would convince common Nigerians that their country’s economy is truly on the path of recovery. Those are the only evidence of an economy on the rebound that the people know and appreciate.

God bless Nigeria.

Shola Oshunkeye is the CEO of Omnimedia Nigeria Limited, and executive director of the non-profit, Sustainable Development and Transparency Foundation.