As Nigerians continue to struggle with news of the nation's second economic recession in five years, and the impact on their welfare, the Nigeria Employers Consultative Association, NECA, and the Socio-Economic Rights and Accountability Project, SERAP, has prescribed a host of policies, including investment promoting policies and drastic reduction in cost of governance as necessary measures to jumpstart the economy.
The National Bureau of Statistics, NBS, at the weekend announced that the country has entered into economic recession as the nation's Gross Domestic Product, GDP, contracted for the second consecutive quarter by 3.62 percent in the third quarter (Q3'2020). The GDP had earlier contracted by 6.1 percent in Q2'2020.
Economic recession is defined as two consecutive decline (contraction) in GDP.
While citing the COVID-19 pandemic as a major factor responsible for the recession, NECA, however, said there is need for the Federal Government to offer more tax cut to promote investment, while also introducing measures to increase demand for goods and services.
Speaking in Lagos, the Director General of NECA, Dr. Timothy Olawale, said: "The report of the National Bureau of Statistics, NBS, showed the country's GDP growth declines by 3.62 per cent in third quarter, Q3, 2020 after an earlier contraction of 6.1 percent in Q2.
"In summary, the GDP for Q1 to Q3 of 2020 stood at -2.48 percent. The Oil GDP fell by -13.89 percent from -6.63 percent in Q2 2020 and Non-Oil fell by -2.51 percent from -6.05 percent in Q2 2020. With negative GDP growth in two consecutive quarters, the economy has invariably entered into recession.
"The cumulative effects of the pandemic, COVID-19, which almost caused a global economic meltdown with serious impact for the Nigerian economy and the attendant lockdown could be said to have contributed to the negative contractions.
"It is, however evident that with the high level of inflation and unemployment rate, reducing exchange rate of the Naira and other macroeconomic indices, there is need for urgent reevaluation and reassessment of Government's economic policies."
The way forward
While proffering a way out of the impending economic quagmire, Olawale contended that "there is urgent need to increase aggregate demand in the economy as a way to spark economic activities. Government should give more tax cut to promote business capital investment while encouraging local and foreign investment.
"Government should fast track the implementation of policies to diversify further its export potential, mostly the huge stock of natural and agro resources to reduce pressure on the foreign reserves. We call for more robust and comprehensive expans-ionary fiscal and monetary policy packages to expeditiously reflate the economy out of the current crisis."
FG should cut cost of governance - SERAP
Also speaking on the way forward, Human Rights group, Socio-Economic Rights and Accountability Project, SERAP, called for reduction in the cost of governance as well as increase investment to ensure that essential public goods and services are available to poor and vulnerable Nigerians.
The group disclosed in a statement signed by deputy director Kolawole Oluwadare, that: "Socio-Economic Rights and Accountability Project, SERAP, has sent an open letter to President Muhammadu Buhari urging him to put the country's resources at the service of human rights, and to support the less well-off to enjoy an adequate standard of living through cutting the cost of governance and implementing bold transparency and accountability measures in your government's response to Nigeria's recession."
Noting that the economic crisis rocking the nation provides an opportunity to prioritise access of poor and vulnerable Nigerians to basic socio-economic rights, and to genuinely recommit to the fight against corruption, SERAP said: "Implementing human rights, transparency and accountability measures would save money, address projected adverse human rights impact of the recession, and fast-track the economic recovery process.
"Decades of mismanagement and corruption, and deep-seated deficiencies in public financial management have directly contributed to higher levels of borrowing and public debts, and consequently, the economic recession. Successive governments have squandered the promise afforded by the country's natural wealth and resources."
It said further that the paltry resources Nigeria invests in essential public goods and services that would benefit ordinary Nigerians couldj be partly explained by the "high spending of public funds to finance a life of luxury for members of the National Assembly, state governors, and other 'powerful' politicians."
SERAP said it was seriously concerned about the adverse consequences of the economic crisis on the human rights of poor and vulnerable Nigerians, including denying them access to essential public goods and services such as healthcare, education, clean water, and regular electricity supply. The group said it would be grateful if the Federal government "begins to implement the recommended action and measures within 14 days of the receipt and/or publication of this letter. If we have not heard from you by then as to the steps being taken in this direction, SERAP shall take all appropriate legal actions to compel your government to implement these recommendations for the sake of human rights, transparency, and accountability."
Priority on Poor, Vulnerable Nigerian
According to SERAP, prioritising the human rights of poor and vulnerable Nigerians means providing public goods and services free of charge for those who cannot afford them.
"This is the time to prioritise poor and vulnerable Nigerians, and to ensure that any response to the recession goes well beyond bailing out large companies and banks," the statement added.
Seven point demand SERAP also urged President Buhari to do the following in order to cut the cost of governance and solve the problem of recession:
"Increase investment in public health, the healthcare system, education services, provision of clean water, and other basic public goods and services that will benefit the majority of the population;
"Re-direct budgetary allocations to renovate the National Assembly complex and take urgent steps to ensure that essential public goods and services are available to poor and vulnerable Nigerians;
"Improve transparency and quality of the information in government budgets and reform public financial management to bring it in line with international standards, and safeguard the right of media and civil society to speak out against corruption and human rights abuses."
Vanguard News Nigeria