Recession, state of our well-being and Economic experts

Since the publication of the 2017 Second Quarter Gross Domestic Product (GDP) Report by the National Bureau of Statistics (NBS), which indicated that Nigeria has inched out of recession, commentators who apparently do not agree with that position have struggled to link their perception to the state of well-being of majority of Nigerians. To them, since there is still an outcry of hardship in the land, then the country’s economy is still neck deep in recession.

They maintain that the recession regime is still on, in spite of the marginal 0.55% positive growth gained after five consecutive quarters of negative outing. However, put simply, a recession results when there is two consecutive quarters of negative GDP growth in a national economy. Exiting recession therefore is when a succeeding quarter growth level turns positive.

For a layman, linking exiting recession and escaping hardship might be excusable since it is largely an expectation; but it hardly would be for those who claim to be economic experts. A number of those who have so classified themselves have in their analysis in the past three months exposed their limited relationship with macroeconomic dynamics; even as some of them have jumped into the popular side of the public gallery while still waving the banner of economic expertise.

Initially the bashing was assumed as a euphoria thing characteristic of the politically partisan Nigerian landscape which sometimes throws sanity to the winds. It was thought ordinarily that it would wane with the frenzy that the report generated in some quarters; but it has not. Some economic “experts” and newspaper columnists still use the erroneous perception to garnish reports aimed at dismissing government’s economic policy initiatives; especially pronouncements that seem to indicate that some progress is being made with gains on the economic landscape. This indeed is unbecoming and requires some intervention otherwise it would linger and eventually become accepted as true.

One does not need to be an expert in economics to know that there is a difference between exit from recession and full economic recovery, even if they are some cross-cutting variables. Simple economics can attest to this! A recession occurs when there are two consecutive quarters of negative GDP growth in an economy; therefore exiting a recession is simply when the quarterly growth turns positive. Even though an exit from recession is a necessary and important precursor for economic recovery, exit from recession does not necessary amount to full economic recovery. There is no real harm talking about it in that light within a context, but using it generally and trying to dress it in an intellectual garb to push a set position would amount to either basic ignorance or intellectual dishonesty.

For those who are well versed in economics as opposed to those playing politics with it, when an economy slides into a recession, the first step towards recovery is to arrest the slump and prevent the economy from sliding further. It is when this is successfully done that building towards economic recovery begins. Simply put, without an exit from recession there can be no recovery. What the Second Quarter report simply indicated was that the slump has stopped and recovery has begun. It did not say that the economy has fully recovered and everyone would suddenly quit poverty and exit hardship.

It is worrisome that some persons who otherwise should know and who should be helping with strategic initiatives and projecting positive values to help drive the economy for the benefit of all have allowed other considerations to becloud their patriotic and professional perspectives. Everybody need not agree on a particular situation or issue, but mischief or half-truths can hardly be helpful in addressing it. Nigeria is particularly unlucky to have some “experts” who are more knowledgeable in propaganda and mercantilism than in the fields they claim to profess.

At the drop of a hat, more than one hundred “experts” could write and discuss on a particular development with largely varying perspectives and positions; often without verifiable indicators, variables, parameters or fundamentals. The country has been invaded by a motley gang of experts who profess according to their respective feelings and expectations rather than the scholarship of their calling.

Just as in the case of dismissing exit from recession on the basis of low level individual indispositions, some of these “experts” point to government’s poor revenue stream and resultant shortage of expendable money to justify their disagreement. In real economic terms, what would be the relationship between coming out of recession and the amount of money available to government for public sector spending? It would be necessary to explain that the Nigerian economy using GDP-by-output has 46 activities. Public administration is just one of the 46; and the “experts” in their analysis are often referring to just one of the activities. There are others which include: Agriculture that does not depend on whether government has money or not to grow; same with Trade and even Crude oil which does not come from wells only when government has money to spend. Financial services, Arts, Entertainment and Recreation, Telecommunications, among others, do not, in strict economic sense and in this context, depend on the amount of money available to government to spend.

Apparently because of the mindset of some of these “experts”, they lose sight of the fact that the report was a GDP report on the whole economy, formal and informal, and not a Public Sector performance report. Government is just one part of the whole economy which the report referred to. By expenditure approach, GDP is household consumption plus government consumption plus government investment plus private sector investment plus net exports. Capital is just one of five (5) parts and the smallest part of the above equation, so it cannot be used to determine recession or otherwise.

There is no doubt or hiding the fact that the Nigerian economy is still in the woods; but unnecessary bashings from arm-chair economic experts who stand facts on the head is not going to help the situation get better. Instead, it will create more confusion and panic in the system which can never be in the interest of anyone, including the acclaimed experts themselves. A simple content analysis of the proposals and postulations of a number of these experts would produce nothing but a cacophony of sounds with very little or no beneficially related substance, because everyone is seeing things from individual perspectives and assuming that such personal positions are the very remedy to the situation at hand.

Ikot wrote this piece from Uyo, Akwa Ibom State.