The disruption caused by the coronavirus pandemic to human activities and financial structures across the world offers Nigeria the opportunity to reset its economy, experts have said.
Countries across the globe closed a larger part of their economy to curtail the spread of the disease, as a result of which many economies are entering into recession.
Even strong economies like the United States, China, Japan, and Germany are slipping into recession.
According to the latest 'Africa's Pulse', the World Bank's twice-yearly economic update for the region, growth in sub-Saharan Africa has been significantly impacted by the health crisis.
The bank forecast a sharp fall from 2.4per cent in 2019 to -2.1 to -5.1 per cent in 2020, what could be the first recession in the region over the past 25 years.
"The COVID-19 shock is hitting the region's three largest economies--Nigeria, South Africa and Angola--in a context of persistently weak growth and investment and declining commodity prices," it said.
According to data from the Nigerian Bureau of Statistics (NBS), the economy grew by 1.87 per cent in the first quarter of this year, the smallest growth rate in over a year.
Last week, the Minister of Finance and Budget Planning, Zainab Ahmed, said Nigeria's economy will definitely go into recession. She said an assessment made by the NBS indicates that the economy will have an average negative growth of -4.4 per cent.
"But with the work that the Economic Accessibility Committee is doing bringing stimulus packages, we believe that we can reduce the impact of that recession," she, however, said.
"And if we apply all that has been proposed and we are able to implement it we may end up with a recession that is -0.4 per cent. In any case, we will go into recession but what we are trying to do is to make sure that it is shallow so that we will quickly come out of it come 2021," Mrs Ahmed said.
Even before Nigeria officially admitted its economy is heading into recession, experts had been offering advice on how to help the impact of the recession.
Speaking with PREMIUM TIMES, a senior economist at SPM Professionals, Paul Alaje, said to cut short the imminent recession, economic activities must be opened to increase demand size and ultimately reduce unemployment.
He also advised the Central Bank of Nigeria (CBN) to reduce the interest rate significantly.
"(The) Monetary Policy Committee needs to adjust the Cash Reserve Ratio so it will mandate banks to give out the facility at a regulated interest rate," Mr Alaje said.
He said CBN will have to choose between growth objectives and fighting inflation.
"At a time like this, we need to pursue a growth objective because as of 2016 to 2017, inflation went up to about 18 per cent but started coming down the moment we were able to reach the required growth."
He also called for the reduction of government appointees and a cut in the salaries of public office holders.
"Both the federal and state governments must pursue the objective of meeting 100 per cent implementation of the capital component of the budget. Borrowed money should be focused on capital expenditure, this will have a reinforcing effect," he said
In his reaction, the Lead Director of Centre for Social Justice, Eze Onyekpere, said the first requirement is the sincerity of purpose on the part of the government.
"Knowing the truth and telling Nigerians the truth about the state of our affairs. For instance, that sincerity will lead us to cut waste in our system.
"You know we have lost 40 per cent of our budgetary revenue due to the crash in the international crude oil price, and they are only proposing to cut down N71 billion out of the budget of about N10.5 trillion. What they are trying to take out, if you work it out as a percentage, is less than one per cent of the expenditure.
"Somebody lost 40 per cent of his revenue and he is removing less than one per cent of his expenditure. Does that make sense? That's why I'm talking about being truthful to ensure that we reduce expenses in accordance with the available resources."
Mr Onyekpere said economic literature recommends spending one's way out of recession so that there would be demand in the economy so that people can buy up goods and services that are produced.
"We have a situation where we are reducing capital expenditure, increasing resources for debt servicing and of course retaining virtually all the recurrent expenditure that we should have left before.
"We have a situation where we are going to borrow money, we have taken money from the IMF, the World Bank and Africa Development Bank, Afrinexim and even locally.
"FEC passed another $1.2 billion to buy agricultural equipment or so of which the honourable minister of agriculture was celebrating.
"The question is this, how do you pay back? We are now borrowing from external sources."
Mr Onyekpere also advised the government to assist local companies that have the potential of cutting Nigeria's international expenses.
"We need to do everything in our power to assist Dangote to start his refinery since our refineries are not working so that we cut demand for foreign exchange to import refined crude oil.
"We should also mobilise our local companies, like in the automobile industry, we should stop buying all these Prado and SUVs. Buy from Peugeot in Kaduna, buy from Innoson in Nnewi and that means that our money stays back with us."
He said this will allow more people to be put to work, companies to make a profit, and result in more tax to the government.
"There are foreign remittances, the World Bank says we are doing between $18 to $25 billion although CBN claims that they only see $2.5 billion. Maybe what they are seeing is the one that comes in through domiciliary accounts.
"You know if your brother in Europe or America sends you money through Western Union, what they will give you here is naira, not the money. But we can manage it more than the foreign currency which comes in here - to boost our foreign reserves and make money available for us for necessary imports and not for somebody to shortchange us and reserve the foreign component of our money out there in Europe or in America.
"For instance, if you look at the report of the Auditor-General every year, he complains that agencies that are supposed to remit operating surplus in the fiscal responsibility act are not remitting. They are owing the government up to a trillion naira every year, they would withhold the money and when the government goes back they are supposed to return 80 per cent of their surplus and retain only 20.
"These are institutions and agencies established by the federal purse. It's like you establish a company when they make a profit. Should they not give you the profit? Whoever here is your employee working for you. But in this case, they take up every profit they make."
He suggested the country have an equivalent of the Treasury Single Account (TSA) for all the revenue that comes to those agencies and then give them their cut rather than leaving it to them to declare what they got.
The CEO, Global Analytics Consulting Limited, Tope Fasua, in an interview with PREMIUM TIMES said the federal government should consider issuing a domestic sovereign bond of between N10 to 50 trillion, since foreign investors are no longer investing in the international markets right now.
"It's a good time to float the idea that it is a good time for Nigerians to invest in Nigeria for the long term. The money realised from the bond issue should then be deployed to work on the base of the country's economy, in terms of investments in education, healthcare, environment, food security, water supply, etc.
"Now that our children are roaming the streets without jobs, it is now that our heads should be correct, to know that we are actually wasting our most important resource. Now is the time to invest in that resource.
"There must be a Marshall Plan. This is important because this is how the other countries grew. They did not focus on foreign debt, but domestic debt. Most of them became great by issuing war bonds to everybody in their countries. This crisis is the time to invest in Nigeria and get out of this problem once and for all," he said.