Rewane, Obi advocate passage of PIGB, tight monetary, fiscal policies as way out of recession

Financial and economic experts have been proffering solutions on how the country can come out of its current recession as soon as possible. They believe part of the solutions that would ease the economy out of recession was the passage of the Petroleum Industry Governance Bill (PIGB) and tight monetary and fiscal policies.

Recalled that in its Gross Domestic Product report for Q3 of 2020, the National Bureau of Statistics (NBS) revealed that the economy contracted again by 3.62 percent, thus sliding into its second recession in five years.

The report showed that the growth in Q3 of 2020 was slower by 5.90 points when compared to the third quarter of 2019, which recorded a real growth rate of 2.28 percent year-on-year.

In August 2020, the NBS had said the economy shrank by 6.10 percent in Q2 largely due to significantly lower levels of both domestic and international economic activity resulting from nationwide shutdown aimed at containing the Covid-19 pandemic.

Reacting to this, Bismarck Rewane, CEO of Financial Derivatives, said there was need to hasten the passage of the PIGB to address the numerous challenges in the petroleum sector.

Rewane was also of the view that federal government should do something about the artificial low interest rate in the economy, which he said had become dis-incentive to savings and investors.

He maintained that the Anchor Borrowers’ Programme of the Federal Government should be continued as a way to cushion the effect.

The economist stressed that the country should consider taking advantage of the West African market to incentivise growth and investment in the economy by reopening the borders.

Rewane was optimistic that the economy would begin to see positive signs and growth by Q3 of 2021.

According to Rewane, “We need to pass the PIGB very quickly. We need to do something about the artificial low interest rate in the economy, which is actually a dis-incentive to investors and dis-incentive to savings. The Anchor Borrowers Programme embarked upon has to be continued.

“We need to consider strongly re-opening our border. I think it should be done very soon. We should also consider taking advantage of the ECOWAS market to incentivise growth and investment in this economy.

“There is no silver bullet; there is no quick and sharp recovery. It is going to be a Ucurve. That is what the future holds. I think that by Q1 or Q2 of 2021, the economy will begin to see signs and by Q3, we will begin to see positive growth.”

On his part, Peter Obi, former governor of Anambra State, questioned government’s borrowing plans, which he argued was not properly invested.

Obi said for the economy to rebound quickly, government should go into vigorous implementable, monetary and fiscal policies.

He added that Nigeria’s economy needs to move from consumption to production.

“The money we are currently borrowing are not properly invested. So what we need now is to go into a vigorous regime, which is implementable, measurable, monetary and fiscal policies to drive ourselves out the present situation.

“Most of the micro, small and medium businesses have collapsed. We have to move Nigeria’s economy from consumption to production,” Obi asserted.