As the country continues to battle the economic recession that recently engulfed it, the Vice Presidential Candidate of the Peoples Democratic Party (PDP) in the 2019 elections, Mr Peter Obi, has given out what can be described as a pathway to economic recovery.
Obi, who spoke on Arise TV on Monday, agreed that the recent recession, which affected about 40 countries around the world, was as a result of the COVID-19 pandemic. He, however, warned that the recession would bite harder on Nigeria because the country already had ‘underlying economic conditions’ ranging from extreme poverty to high unemployment rate, high number of out-of-school children, highest infant mortality rate and soaring incidences of drug abuse, among others.
Obi explained that unlike the previous recession, where Nigeria recklessly borrowed its way out, this present recession demands fiscal discipline for the country to scale through.
He argued that the COVID-19 fiscal stimulus of about $5 billion, provided by the Federal Government, to recover the economy, was too low. Obi said such an amount would have little or no positive impact on the economy. Comparing Nigeria with comparable nations like India, Obi said they were spending around $300 billion to help them exit the recession, out of which $50 billion is for supporting small businesses. He further said that what was more worrisome, was the fact that even the little fiscal stimulus provided in Nigeria, was not getting to the right people and are not well accounted for too.
He opined that Nigeria’s economy will bounce back if government supports small businesses. “When government supports and empowers small businesses, there will be greater productivity which will reduce unemployment, generate more revenues for the government and increase development in the country. China, for example, finances most of their budgets with taxes from small businesses, because they have a strong MSME sector that contributes greatly to their economy,” he explained.
Obi also suggested a private sector driven economy that would lift many financial burdens from the government. He said the government could partner with private companies on road construction and maintenance and other public utilities. Apart from generating more revenues for the government, Obi said such moves would help curb wastage and financial imprudence associated with the public sector.
He further called on the government to ensure that every kobo borrowed in the country is put into productive use and not consumed or wasted. He advised Nigerians to focus their strength on building the nation’s economy and not be distracted by any political drama going on in the nation.