Thoughts on Nigeria’s Economy -By Jide Akinyooye

Although, President GoodluckEbele Jonathan has the responsibility for overallperformance of his administration, I decided to direct my Open Letter on economic outlook of Nigeria in 2015 to Madam NgoziOkonjo-Iweala, the Honourable Minister of Finance because Ministry of Finance and Economic Development is the co-ordinating point of Nigeria economy. I chose to take this initiative as a result of my different view to the general phenomenon that our political leaders are usually insensitive to contributions of citizenry on various emanating issues. Honestly, this awkward perception is contributing to our daily woes as a country. In this regard, I consider it warranted to make personal contribution by reviewing our economic situation viz-a-viz implications for businesses in Nigeria.

Let me start by commending the Honourable Minister of Finance for her roles in piloting our incumbent President in his process of economic transformation. I cannot pretend or ignore the fact that Federal Government though the Ministry of Finance has presented their score card and awarded pass mark on Nigeria achievement as far as economic growth is concerned. This seemed to be in order because I believe that Finance Ministry must have followed various economic indices before declaration on economic performance. Perhaps, recent reduction of fuel pump price from N97:00 to N87:00 could form part of this testimonial. This has even been re-echoed at various Presidential campaign rallies of President Goodluck Jonathan……

Without any bias, the Finance Minister has been seen to initiate various practical efforts that are yet to yield visible result. Notwithstanding, it is on record that she has really tried to perform as an economic guru in her official capacity. However, the overall performance of Finance Ministry in relation to economic growth is actually exaggerated. In fact, a lot of people feel so bad whenever they hear commendation or appraisal that our economy is growing! It is right time to let the drivers of our economy to feel the real pulse of millions of Nigerians that our nation’s economy has been optimally handled. If economic experts conclude that Nigeria’s economy is growing at X rate, the question from the masses is that of what economic benefit is an economy that grows, while the citizenry is dying of hunger at every hour? That is not to mention that we lack confidence in the capability of the current economic drivers.

ational income. The courage is that if Lagos State under administration of Senator Bola Ahmed Tinubu could survive economic heat following the withholding of its revenue allocation; it means that the dawn of oil crash era may be an opportunity to realistically redirect our economy towards better efficiency in the interest of masses. A lot of indications have been heard on the intention of the Federal Government to increase internally generated revenue, possible increase in some tax rates like Value Added Tax, Company Income Tax and, efficient tax collection and further diversification of economy. It is believed that Federal Government is merely waiting for electioneering period to be over before implementing those options as means to sustain its budgetary management. Personally, my fear is that if the administration of President Goodluck Jonathan has not practically impacted much on national economy within a period of about 6 to 7 years, what can he do within the lifespan of 4 years, if he is lucky to be re-elected?

Whilst I am not against most of the fiscal remedies mentioned above, I consider it necessary to caution the Federal Government by reminding our economic drivers that current unemployment rate of 30% is a big threat to desired economic growth. Hence, we must be very careful not to complicate a few subsisting issues. The Finance Minister should understand that we should not necessarily increase our tax rates in order to increase our tax collection. We just need to be more efficient in our tax collection system. Also, Finance Ministry should sincerely advise Presidency to curb recurring wastages associated with our day to day governance. It is undeniable that billions of Naira is being spent to maintain the office of First Lady, which has no provision in the Constitution of Federal Republic of Nigeria. The same unjustifiable spending relates to the National Assembly and other parastatals.

We cannot afford to shun solid mineral sector anymore because Nigeria is blessed while we fail to take full advantage of it. Government has invested enough resources in power generation, while corruption has not enabled realization of expected result. This suggests why anti-corruption institution should be strengthened in order to fight corruption and repatriate stolen funds to oil our dwindling economy. Agricultural sector must be revived to full length. If mechanized farming is made possible and we begin processing of our farm products for local consumption and exportation, we shall soon join the leaders of global economy. Presently, Nigeria is just a consuming nation without production capability and it is sad that we are exporting job opportunities to foreign countries after wasting large unaccountable funds on foreign trips, while our youths are under-employed and completely unemployed. This current reduced oil price is enough reason to impose fiscal discipline in our governance right from the federal level as a leading example for state and local levels to emulate.

The Finance Minister must charge the Presidency to go back to the drawing board to avoid running government with deficit purposely to finance recurring expenditure. The implication of debt servicing and diminishing nation’s reserve is already having effect in our treasury. Finance Minister should assiduously work with the Central Bank of Nigeria to facilitate price stability and policy coordination. A few barriers to the private sector growth must be seriously addressed. As at today, the current tax regime applicable to the Insurance industry is a major hindrance to unlocking the growth potentials of the sector; it is funny that the basis of minimum tax, calculation of unexpired risks and restrictions on deductibility of certain operating expenses continued to be unfavourable just like every other business sectors, while no administration has been concerned to initiate required reform. It is high time for the economy drivers to be sensitive to basic expectation that will promote our business sector if economic transformation is actually desired.

Finally, policies must be redirected towards resuscitation of various moribund industries. The Petroleum Industry Bill must be signed and pursued towards implementation and adjustment must be made to all sides at all levels. Direct economic impact must be felt by the common people and this needs to be practically acknowledged and not just for accountability or academic purpose as it seems now. There is no way the nation will follow an ideal economic path that required dividends will not accrue to growth. The issue of foreign direct investment is automatic especially, if we can insist to do the needful at the appropriate time.

In conclusion, I expect our Finance Minister to convince our incumbent President that year 2015 might not be tough as he publicly raised the fear that it will be. Definitely, with right policies and monitoring, the dwindling oil prices might be the greatest opportunity to retrace our steps, even though we have never learnt to learn from the past. Also, I would like to mention that all those beautiful promises and bold ideas by the incumbent President in his recent campaigns could have propelled our economy had he incorporated them into his governance. Nigeria deserves better and realistically achievable economic policies, in order to enjoy dividends of democracy.