Opinion: Nigeria’s Economic Recession Caused By Global Oil Price Drop..Stop Blaming Buhari & The APC

how to end recession in nigeria

October 4th, 2016  – Oil Revenue Can’t Make Nigeria Rich. See 5 Ways To End Recession

Opinion: Nigeria’s Economic Recession Caused By Global Oil Price Drop..Stop Blaming Buhari & The APC

Looking at how the APC is going about the Nigeria economy because of the recession arising as a result of the global oil price drop,  there is urgent need for critical approach to revive the Nigerian economy in order to enable Nigeria grow enviable foreign reserve that will place Nigeria among the top 20 economy of the world within the next 5 years.

Oil Is Gone

Let us not deceive ourselves as oil cannot make us great because we have misused the opportunity when we had the oil boom so let us forget about oil because the west has started looking for other sources of energy outside oil of which it has already started yielding results. By the next 5 yrs oil will be next to nothing as there will be other alternative sources of energy even cheaper than oil.

We must diversify the economy by going into mechanized agriculture immediately which the Federal government must aggressively get involved by owning Federal Farm settlements across all the states in Nigeria that will go into massive mechanised farming that will produce economic cash crops which they will process thereby providing the needed raw materials for our local industries as well as for export and even for our local consumption thereby saving us a lot of foreign exchange.

It is only Government that has the right funding to go into this type of massive agriculture for now.The private sector will equally get involved when the Government lead the way.
Diversifying the economy should not be a mere propaganda as usual by past Nigeria governments because the past governments in Nigeria has always talked about diversifying our economy only to end up doing nothing and continue to rely on oil.

Our state governments and local governments will equally follow suite.
Right now both our states and local governments are idle.
Federal Government will need to invest in massive infrastructure especially on power generation so that Nigeria will become an industrialised nation.

Also now is the time for the Federal Government to recognize the informal sector.
Government must at this point in time allow foreign inflows of foreign exchange from all sectors of the economy into Nigeria as a way of boosting our economy.

Dislodge all the obstacle obstructing our banks from receiving foreign inflows as that will help this economy get the much needed foreign exchange especially at this time. Our banks are already dying because their licence is under utilised coupled with massive unpaid loans due to high bank interest loans which the borrowers are unable to pay.

The Central bank of Nigeria will need to do something urgent about bank high interest rate and bring down the interest rate on lending because right now the interest rate on lending is so high that it is almost impossible for borrowers to redeem the loan.

The high bank interest rate makes the Lender equally guilty as a criminal just like the borrower who is unable to redeem his/her bank loan because of the high interest rate. This also has dealt a devastating blow to our banking sector and the economy in general.

Cases of Delinquent bank loan debtors and Non performing Loans must be reviewed urgently and a low interest rate regime instituted urgently by the central bank of Nigeria so that most bank loan debtors can be able to pay their debts to save our financial system from collapse.

Furthermore the Government must encourage startups and establish an agency for startups so that we can produce global brands in tech companies which will equally create massive jobs for our unemployed and grow our economy as well.

The Nigeria music industry and Nollywood must be incorporated into our foreign policy and must be another engine for foreign exchange generation for Nigeria.
In view of the economic recession presently raising tax is a wrong approach as it will trigger inflation just as we are witnessing at the moment.

Government will find a way to reduce tax urgently before our Naira is gone because the Naira is Nigeria not even the National flag(the Green white Green) so we must protect the Naira at all cost.

Nigeria at this time need to be a tax haven in order for us to overcome this economic recession quickly and reclaim our position as the giant of Africa.

Tax haven countries offer foreign investors low tax rates and other tax features designed to attract investment and thereby stimulate economic activity.

Tax haven governments appear to be adequately funded: their average 25 percent ratio of government to GDP exceeds the 20 percent ratio for the world as a whole.
At this point Nigeria needs other countries black money which will act as a great Foreign Investment to Nigeria.

Nigeria do not need to fret about (OECD)Organisation for Economic Co-operation and Development for being a tax heaven because we will still comply with OECD five criteria even as a tax heaven.

With all these measures put in place, the economy will boom and crime will decrease to bear minimum and there will be stability in the polity.

Let me use this opportunity to urge all Nigerians to be patient with President Muhammadu Buhari and the APC in their task to rebuild Nigeria as they will definitely get Nigeria out of this recession.

[Article By Boniface Ogada]

9 thoughts on “Opinion: Nigeria’s Economic Recession Caused By Global Oil Price Drop..Stop Blaming Buhari & The APC

  1. What a great and wise comment from brother Boniface Ogada. No matter what we are currently experiencing in our nation today, truth must be told. President Buhari is not the cause of our current recession, our past leaders have misuse, mismanaged, and squandered the oil wealth when we had oil boom for almost forty years. There are many successful research about other energy sources to power our cars, generate electricity aside of crude oil. In the next five years, oil will worth nothing and countries like Nigeria that depends solely on revenue from crude oil will suffer great economy setbacks if we refuse to learn our lessons, and start investing heavy on agriculture and mining our mineral resources in our various states. Saudi Arabia, Iran, Kuwait, Russia and other oil producing nations are going through economy hardship but not like Nigeria because they were prepared for the sudden oil drop by investing in their infrastructures, education, electricity, huge reverse and sound healthcare, and they are not 100% dependent on crude oil like us. Is going to be rough before it will start settling down only if we can divert our resources to small scale and mechanized agriculture with the support of the state and federal government. But private investors must invest heavy on our agriculture sector because government doesn’t even have the money to invest in any thing right now.

  2. RECESSION IS a resultant effect of many factors, and so the global oil price drop cannot single-handedly plunge a whole nation into dire straits as we have found ourselves today. If we were prepared for this by earlier saving, earlier diversifying our economy, the fall in oil price would have perhaps not been felt at all by Nigeria. And ill-advised decisions as well contribute to the problem. A wise decision is the most important thing we need now. An experienced captain could still manage to sail his ship through a storm, even though he is not the cause of the turbulence. Whereas an inexperienced captain plunges the ship to the buttom of the sea. And he, too, is not the cause of the tempest.

    THE TRUTH IS that PMB has made his mistakes that contributed to this. To say he is not involved is an ellusive denial of facts. He may not bear the chunk of the blame, but I know that PDP would have managed this situation far better.

  3. Recession was well boosted by Buhari and APC govt policies, I.e. Is recession that ill advised govt not to devalue when analysts warned Buhari?, is recession a Nigerian? Why did Buhari ban rice importation when our local production capacity is low? Why implement TSA in a hurry in a way to single handedly run the economy? Why hurt the economy at this stage where the rich are afraid to bring cash due to EFCC harassment? What goes around comes around…APC came in through door of corruption and poverty campaign yet poverty is even higher now than before and courtesy of APC myopic economic policies.

  4. What happened during 9/11 saga when terrorists mainly from Arab world attacked World Trade Center and many people lost their lives had forced some western Countries especially United States to change their view and dependency on oil. Sixteenth out of 19 hijackers were Saudi Arabia citizens and that incidence really severed their relationship even though United States did not make it confrontational.

    Since then United State started their aggressive campaign about energy efficiency. They started working on how to cut down their oil dependency otherwise they can be trapped with crude oil dependency which can make them defend-less during the time of trial. Since then, they have been succefully in innovating the Electric Cars, Hybrid Cars, Geothermal energy, producing energy from Corn Ethanol, Fossil Fuel, Solar Energy, most new houses in United States are equipped with solar panel. The way technology is moving now, our oil may not be relevant by 2025. This is s fact because they are working aggressively to achieve that not we developing nations that are just making false promises.

    What we need to do now is to quickly come out of our shell and thinking out of the box as the writer has indicated to start doing something alternatively to revive our economy before it’s too late. Agriculture is one of them. If we can engage in mass farming, we can feed the whole Africa and that will also increase our GPD.

    Another idea is for each state in Nigeria to start digging their natural resources to generate income. All these resources cannot sit down there and for us to be crying of starvation. God gave us these resources to explore on and for our benefits. Some states in Nigeria were blessed with mineral resources such as Iron Ore, Coal , Aluminium, Oil &Gas, Gold, Limestone etc. Exploring on these alone can improve our economy geometrically.

    I learnt recently that Lagos State, Ondo State and Kaduna have discovered Oil. Why can’t we make a deal with some investors who will not only help us generate income for the State but providing thousands of jobs for the state indigenes. Instead of crying that you have not receive Federal allocations, State can be able to pay its workers and the Federal allocation will just be a bonus.

    Another suggestion is to consider decentralization of power because everything is centered on Federal Government and the World is now civilize that no Country should responsible for 36 States like we are doing right now. That is too much for central government to handle with population of 200 million. There are some certain issues that those in Senate should be deliberating on instead focusing on how to steal oil money. Let see if this system of each state running its affairs with available resources in collaboration with Federal government monitoring these will work which I believe will make a significant difference and help ease the recession plaguing the Country.

    We don’t have time to waste, the earlier we can come up with different idea, the better for us. The world cannot be moving in geometrical way and we continue to move in Arithmetical way. We cannot meet up with the rest of the World if we don’t try something different.?

  5. I discovered you enumerated the best ways to redeem our ailing economy out of recession and that is what makes your article informative. Now let me list out your intelligent points you’ve made so far if nigeria is to witness any economic recovery.

    You mentioned that :

    (1)THEIR SHOULD BE REDUCTION OF BANK INTEREST RATE OR TAX TO ENCOURAGE FOREIGN INVESTORS

    (2)THEIR SHOULD BE MASSIVE INVESTMENT IN AGRICULTURE.

    (3)NIGERIA MUSIC INDUSTRY AND NOLLYWOOD MUST BE INCORPRATED INTO OUR FOREIGN POLICY AND MUST BE ANOTHER ENGINE FOR FOREIGN EXCHANGE GENERATION OF NIGERIA.

    (4)GOVERNMENT MUST ENCOURAGE START UP SO THAT WE CAN PRODUCE GLOBAL BRANDS IN TECH COMPAMPANIES TO CREATE MORE JOBS.

    (5)FEDERAL GOVERNMENT SHOULD INVEST IN MASSIVE INFRASTRUCTURE ON POWER GENERATION.

    Those points enumerated by you are intelligent and well thought out facts that can lift our economy out of recession.

    Although presently there are draw backs or inhibition in achieving our goal particularly in the aspect of agriculture. current administration has made N220 billion available through CBN for micro,small and medium farm enterprise development in nigeria. Of course such move to encourage mechanized farming to boost our agricultural sector and making it another source of the nation’s revenue is highly commendable. But do you know that there is serious obstacle in the development of agricultural sector in the country today despite the billions that has been injected into that sector? Do you also know that many farmers from south south and south west have raised bitter complain over the inaccessibility of this money that is often made available to the northern farmers? Is this how buhari-led government will invest in agriculture that will see nigerians having surplus in food and be made available for export?

    If the current administration is truly serious to rebrand our nation and lift it out of the current economic doldrums, then let them say no to the dangerous obstacle of tribalism,favoritism and unnecessary hate of other ethnic group in the country.

    The N220 billion injected into agricultural sector this year should be made available to all farmers in all states,be it large,macro or medium scale farmers,they should all benefit from it. The unnecessary burdensome requirement and the interest rate should also be lessened so as to encourage unhindered access to this funds.

    Other sectors should be visited such as AJAOKUTA steel industry,abandoned bitumen industry,rubber and cocoa plantation among others. It is only by annexing the full potentials of all our mineral sources in the country can we see a spike in our economy recovery.

    However,where I totally disagree with you is where you mentioned that the economic recession in nigeria was caused by sharp drop in the price of crude oil. If you are good at record keeping or in documentation,you will come to see the two major blunders that was committed by the current administration. NAIRA DEVALUATION and INCREMENT IN THE PRICE OF PETROLEUM PRODUCT. That is what has endangered, chattered and crippled our economy and not categorically the reduction in the price of crude oil in the international market as some would point out including you.

    Let’s take Obasanjo’s administration for example. the price of crude oil was sold at the rate of $9 dollars per barrel but that man was able to manage our economy in such a way that their was no recession. Now compare that price to the current price of crude oil today. Crude oil is now being sold and fluctuating between the rate of $48,33 cent and $45 dollars today. And that is 5 good times of the price it was sold during Obasanjo’s administration and there was no single complain or casting of blame on his predecessor. Due to this glaring fact,many economic analysts and some highly placed nigerians have come up with heavy criticism of the current administration pointing at drop in price of crude oil as the reason for the current economy woes. Don’t let me delve into more facts. Aside from the crude oil issue,your article is insightful.

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