Ibadan, Sept. 5, 2017 (TNE): Following Tuesday’s announcement of Nigeria’s exit from recession, economist and financial analysts have called for proactive monetary
policies aimed at sustaining the current boost in the tempo of economic activities.
The Nigerian Expression (TNE) reports that the National Bureau of Statistics on Tuesday announced the exit of the country from its worst economic recession in more than two decades, notching up growth of 0.55 per cent in the second quarter of 2017.
In its report released on Tuesday, the data show that the economic recovery was driven by improved performance of oil, agriculture, manufacturing and trade sectors of the economy.An economy is said to be in recession after contracting consecutively for two quarters.
A professor of Economics, Femi Ajayi, said that there must be absolute commitment toward sustaining and improving the growth recorded if truly the nation has exited recession.
“ These could be done through sustaining the increase in production, improving upon the value of the naira in the market and creating investment-friendly environment to attract more investment and investors. “We must also see to the empowerment of our youths to reduce unemployment and increase production. We must also not relent in ensuring food security and shelter,’’ he said. Ajayi, however, said that the nation could only be said to have exited recession if those compiling the economic statistics are “ on the same page with the people.’’
The don, a lecturer at the Department of Agricultural Extension, Obafemi Awolowo University, Ile-Ife, said statistics alone could not be used in measuring if the country is out of recession.
He said: “How has the exit affected the value of naira among the comity of nations? Has the naira appreciated favourably at the exchange market?
“Has the prices of goods and services dropped to an affordable rate for the common man? Has production increased in the country and what is the level of export?
“Has there been reduction in unemployment rate? Are investors coming into the country and investing. Do we have our people also creating jobs and producing? ’’
An economist, Dr Benjamin Aderopo, on his part, said the Federal Government must urgently examine its monetary policies to ensure a continued stable economy.
Aderopo said inconsistency in government monetary policies must stop, adding that a fixed exchange rate should be adopted to further strengthen the economy.
He further explained that government must ensure that it spends more on capital expenditure and less on recurrent expenditure.
“ Where government continues to spend less than 30 per cent of the nation’s income on capital expenditure and more than 70 per cent on recurrent, the economy might slide back to recession,’’ he said.
He said the statistics by NBS that the GDP grew by 0 .55 per cent ( year -on -year) in real terms in the second quarter of 2017, is commendable, adding that efforts must be put in place to sustain and also improve on this. Mr Rotimi Agboluaje, a financial analyst, said that exit from recession is sustainable given that the basic economic fundamentals are improving every day.
Agboluaje noted that inflationary rate is coming down in a marginal form, adding that it has come down five consecutive times.
“The foreign reserve is over $31 billion and the forex is market liquid. “ Many Nigerians are embracing SMEs which contributes 45 per cent to the GDP.
“CBN has introduced a number of policies aiming to boost local production such as Anchor Borrowers’ Funds. “ Remember that contraction in the economy was caused by over-importation and crisis in the energy sector especially plummeted price of oil in the global market,’’ he explained.
He said that the nosediving narrative in the sector is being reversed given that the hostility in Niger Delta region is subsiding on a daily basis. Agboluaje also said that the executive orders by the Federal Government is to facilitate ease of doing business and reduce red-tapism in setting up business.
“This will reduce time wastage and corruption. It will increase certainty in the business environment and boost investors’ confidence in the economy.
“This will bring more foreign investments. “ When there is more foreign investment, GDP will improve, rate of unemployment will drop, people ‘s purchasing power will get a filip and other multiplier effects ensured,’’ he added.
He believes that positive GDP is sustainable, provided that the managers of the nation’s economy are not working at cross purposes.
“ For instance, there is supposed to be a synergy among the fiscal, monetary, trade and industrial policies authorities and formulators,’’ he said. Also speaking, a financial expert , Mrs Adejumoke Wojuade , said government needed to focus more on the fight against corruption if the country must continue to stay out of
Wojuade said the Federal Government must strengthen the anti-graft agencies and also ensure that corruption is put in check.
According to her, government must curb wastages of financial resources and also embark on policies that would stir the economy positively.
She added that monetary policies must be given adequate attention for the economy to grow maximally.
However, an economist, Mr Yinka Anjuos, said that Nigeria could not be said to be out of recession with the reality of the present economic situation in the country.
According to Anjous, the economic indices and parameters show that in reality, the country is not out of recession as the prices of food items are still relatively high.
“On paper and theory, the country can be said to be technically out of recession but in reality, the country is still in recession,’’ he said.
Anjous said before the country could be said to be out of recession, education, health, agriculture and power sectors must be fixed and sustained. (TNE)