President Muhammadu Buhari must take urgent steps to halt the country’s economy from slipping into recession, economic and social rights activist, Eze Onyekpere, said on Thursday.
Mr. Onyekpere, Lead Director, Centre for Social Justice, CENSOJ, was speaking against the background of a warning by the Monetary Policy Committee of the Central Bank of Nigeria on Tuesday that proactive steps should be taken to revive growth in key sectors of the economy.
At the end of the MPC meeting on Tuesday, the CBN had noted the figures National Bureau of Statistics, NBS statistics, which showed that real gross domestic product, GDP grew by a mere 2.35 per cent in the second quarter of 2015 compared with 3.96 per cent and 6.54 percent in first and the corresponding period of 2014.
Other indices, according to the NBS, showed a declining performance by the economy, with real GDP projected to grow by a paltry 2.63 percent in 2015 against the growth of about 6.22 per cent recorded in 2014.
Headline inflation, on year-on-year basis, also rose to 9.3 per cent in August, from 9.2 per cent in June and July 2015, while net domestic credit, which was up by 11 per cent, could top 16.49 per cent before the end of the year.
The bearish trend in equities in the Capital Market showed that the All Share Index, ASI decreased by 9.3 per cent from 33,456.83 in June to 30,332.68 on September 18, 2015, while market capitalization equally dropped by 8.8 per cent from N11.42 trillion to N10.42 trillion.
As at September 17, 2015, the country’s foreign reserves dropped from $31.20billion at end July to $30.63billion, amid continued pressures on the performance indicators of the banking sector on the back of the implementation of the Treasury Single Account, TSA policy.
Mr. Onyekpere noted that the elongation of the tenure of state government loans as well as loans to the oil and gas sector could aggravate the liquidity squeeze in banks thereby impairing their financial inter-mediation role.
The absence of a synergy between monetary and fiscal policy, he pointed out, remained one of the most potent obstacles to sustainable growth.
To halt the continued drift in the economy, the CSJ director urged President Buhari to immediately appoint his Ministers, especially the Minister for Finance and Economic Management as well as constitute the Economic Management Team.
Besides, he said the President should urgently unveil his administration’s economic agenda and give Nigerians the opportunity to make inputs for its modification and fine-tuning.
“Public and private stakeholders cannot continue to grope in the dark and imagine the content of government’s economic agenda. The unveiling of a holistic framework has become a matter of urgent national importance,” Mr. Onyekpere explained.
The President, he said, must make the State of the Nation address on October 1, 2015, with a focus on the economy, his administration’s achievement so far, as well as plans for the short and medium term to revive the economy.
To create synergy between fiscal and monetary policy, Mr. Onyekpere called for the unveiling of the Medium Term Expenditure Framework and Fiscal Strategy Paper 2016-2019 as required by the Fiscal Responsibility Act, FRA.
To free up resources for national development, the CSJ chief said government must cut down the cost of governance, including the allowances and overhead costs of running the bureaucracy across all arms of government.
Other proposals for government consideration include the review of the subsidy for imported petroleum products, while completely removing petroleum subsidy from the fuel pricing template from the 2016 federal budget.
He urged state governments to embark on a professional review of their financial management including expenditures with a view to cutting down costs.
“Maintaining bloated, frivolous, wasteful and unnecessary expenditure heads at a time state government revenues have declined due to low oil prices will surely build up another backlog of salaries.
“Further, continued borrowing from deposit money banks and the capital market is not the way forward for states that could not pay back their due loans and needed the intervention of the CBN and Debt Management Office to reschedule their debts.
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