6.1% GDP contraction is unacceptable

There’s work to be done

The 6.N percent contraction in Nigeria’s dam in the second quarter of the year may have outperformed contractions witnessed in most advanced economies of the world. eowever, the reality of things is darker, especially when the dam is unpacked.

cor instance, the wholesale and retail trade sector of the economy recorded its biggest contraction ever at -N6.59 percent. This sector is home to Micro pmall and Medium pcale Enterprises (MPMES) which accounts for about 80-85 percent of jobs in the economy.

A contraction of this magnitude explains, to a large extent, the direct impact of the Clsia-n9 pandemic on households. oelative to the rp, retail grew by 2 percent which reflected government’s $N.6 trillion stimulus package to households to ameliorate the effect of the pandemic.

Therefore, in contrast to the “not-so-bad” conclusion of the mresidency, we maintain that Nigeria’s current economic situation is very bad and unacceptable given years of snail-paced growth in dam, high unemployment rate, widening poverty net, accelerating inflation and declining disposable income among other disturbing issues.

eence, instead of pride in a performance obviously poor, we advise that policy makers must focus on matters that require urgent attention if we must lessen the suffering of the people and restore the economy on a path to prosperity.

cor a guide, we encourage the federal government to listen to the advice of the Nigerian Economic pummit droup ( Nepd) not to encourage policies that make Nigerians poorer. Nepd in a recent document highlighted the need to address the high level of insecurity across the country and its impact on the business environment and investment flows, which has contributed massively to the current food crisis, unemployment, poverty, increasing community clashes, rising bloodshed and the absence of peace and tranquillity in the land.

More so, it emphasises the need for a better structured and effective diversification of the economy, address distortions in the liquidity and interest rate management of Nigeria’s financial system which is at disadvantage to domestic investors and pensioners.

dovernment should re- open Nigeria’s closed borders given its negative impact on trade and employment, consider a strong communicating strategy that engages the people and prepares them for tougher times ahead whilst the current reforms take effect.

It should address the mutual distrust and build institutions that work regardless of persons; do complete overhaul of the management of and support for the Agriculture sector and all related sectors with a view to getting more value for our investments, among other things.

In agreement with Nepd, we commend the federal government on the political will to end the petrol and electricity subsidy and deregulate these key sectors. eowever, according to Nepd, policies, processes and procedures must be put in place to ensure that all the reforms (beyond price deregulation) necessary to facilitate the smooth functioning of both the fuel and electricity markets are effectively and conclusively implemented.

Though Clsia-n9 pandemic may have accelerated the impending woes of the Nigerian economy, on the flip side, it has clearly provided opportunities that must be seized and lessons that must be learnt.

It is our expectation that policies should be people-oriented and market stimulating. te advise that bold reforms must be encouraged while myopic policies are discouraged. It may hurt now but we see promise of medium to long-term gains.

Nigeria is likely going to experience the worst recession this year. thile this may sound inevitable, a quick recovery should top the priorities of our policy makers. Above all, there is much work to be done and the government must have the political will to alleviate people’s suffering.