TheNewsGuru

Tag: recession

  • Nigeria exited recession ‘faster than expected’ – World Bank

    Nigeria exited recession ‘faster than expected’ – World Bank

    The World Bank has said that Nigeria moved out of recession faster than its forecasts had predicted.

    “Following a 6.1 percent year-on-year contraction in 2020 Q2, Nigeria’s economy contracted by 3.6 percent in 2020 Q3, and expanded by 0.1 percent in 2020 Q4, moving out of recession faster than expected,” the bank said in its Africa’s Pulse, a biannual analysis of the near-term macroeconomic outlook for the region published in April.

    “For the year, Nigeria’s real GDP is estimated to have contracted by 1.8 percent, a stronger out turn than projected in the October 2020 forecast.”

    Meanwhile, the bank said it expects Nigeria’s economy to grow by 1.4 percent in 2021 as the country continues to recover.

    “Nigeria, South Africa, and Angola, the region’s three largest economies, are expected to return to growth in 2021, partly owing to higher commodity prices, but the recovery will remain sluggish,” the bank.

    The bank added that Nigeria’s economic growth is expected to be slower than other countries in West Africa due to inflation, high unemployment and COVID-19.

    The country’s growth will be “driven by telecommunications services, trade due to the gradual opening of borders, agriculture due to an additional influx of labor, and construction, in a context of higher oil prices and fewer mobility restrictions,” it said.

    “However, consumer spending and business investment are likely to remain subdued in 2021 as double-digit inflation, high unemployment, and the slow rollout of the COVID-19 vaccine weigh on households’ real income and business confidence.

    “Limited fiscal space will also constrain the recovery. Growth is projected to pick up to 2.1 percent in 2022 as rising oil output bolsters exports, and the rollout of the COVID-19 vaccine gathers pace, helping to boost private consumption and fixed investment.

    “Progress on the liberalization of the exchange rate regime could boost private sector activity and support stronger economic growth.”

  • Essential commodities are back – Dele Sobowale

    Essential commodities are back – Dele Sobowale

    Dele Sobowale

    “History does not repeat itself; man does.” Professor Barbara Tuchmann, Harvard University, USA.

    One man who is currently repeating himself, to the sorrow of Fellow Nigerians, is President Buhari. History has already recorded that as Military Head of State in 1984 to August1985, he led Nigeria to the first economic recession since independence. Recession by its nature is an economic monster destroying numerous public and private assets – ending up in increasing the Misery Index.

    In 1984, inflation reached unprecedented heights; companies laid off workers and created record level of unemployment; aggregate purchasing power declined precipitously. More Nigerians went below the poverty line in the twenty months of Buhari’s administration than ever before. Nigerians never had it so bad. And, all these were happening under a “corrective regime” which seized power on December 31, 1983. To silence Nigerians, the junta resorted to draconian measures and repressive decrees making grumbling out loud a punishable offence. It was the period of “Suffering and Smiling” – as Fela Anikulapo rendered in his immortal music.

    But, of all the calamities afflicting those alive then, none was worse than the emergence of “Essenco” or as Essential Commodities were called then. Those too young to be aware of the hardships Nigerians face, as well as those unborn at the time will find it unbelievable that, at one time in Nigeria, housewives and grandmothers had to stand on queue for hours just to be allowed to buy two tins of milk, sardine, infant milk powder, a box of detergent, two cakes of bath soap and some Maggi cubes. In truth that was what mothers and grandmothers went through under Buari’s brutal government.

    But, the greatest challenge Nigerians will face in the next two years will be the return of essential commodities. The longer it persists, the harder it will drive inflation. If care is not taken, we might be experiencing 30 per cent or more by the fourth quarter of this year. The worker’s take home pay which now cannot take him home, might not even get him to work if fuel scarcity kicks in.

    Brutality was an ever present aspect of the allocation of “essences”. Soldiers were in attendance at each allocation point; and the young thugs in uniform whipped mercilessly people old enough to be their grandmothers. I lived in Kaduna at the time, but my schedule of duties took me to all the Northern state capitals at least twice a month. Watching young soldiers whipping, slapping and kicking women with bestial abandon was an experience not to be forgotten – even in a thousand years. And, all the women wanted was the chance to buy these basic necessities for their families. Nigerians reading this must ask themselves a simple question: what sort of leader visited such atrocities on his people? The answer is: Buhari.

    GET SET FOR ROUND TWO OF ESSENCO WITH BUHARI.

    Those of us alive in 1985, when Buhari was d kicked out of office heaved sighs of relief. We were saved by the Almighty from worse barbarism that would have followed if Buhari/Idiagbon had continued in power. Nigerians, apparently are masochists. We love leaders who cause us great pain. So we elect as many of them as we can. Buhari returned to power in 2015 with our votes. Since then, the following disasters have also returned to Nigeria. Let me mention a few.

    First is recession; and this is what Buhari’s government announced for 2020.

    “ Nigeria’s GDP in the fourth quarter of 2020 grew by 0.11 per cent in real terms in the fourth quarter of 2020. This follows, if you will recall, two consecutive negative growth in the third quarter and second quarter of 2020, which saw the country going into recession. As a result of this fourth quarter positive growth, the total growth for the year 2020 is -1.92 per cent.”

    Inflation rushed in after it. Here is proof.

    “Pressure on food prices spikes inflation to 17.3%”. News Report.

    “This marked the highest figure recorded in the country since 2017.” Another Report.

    That was how we started in 1984. Hyperinflation led the parade of unfavourable economic indices and at one time reached close to 30 per cent. That invariably resulted in lower purchasing power and decline in aggregate demand. Industrial capacity utilisation followed inevitably and retrenchment followed – like the last man in a parade of mourners.

    As in 1984/5, we are not facing inflation caused by too much money chasing too few goods primarily. What we have on our hands is supply-side inflation. Producers of goods are now incapable of supplying what consumers want. When Buhari ordered the Central Bank of Nigeria, CBN, to stop providing foreign exchange to food processors and importers, he had in effect reduced aggregate production because not many in the Food and Beverage Sector can survive without collecting foreign exchange at official rates. Parallel market rates automatically introduce inflation. Now supermarket shelves are becoming empty. Even King Coca–cola is now rationed to distributors. That is always a weathervane showing where the wind is blowing in the sector.

    We are experiencing the same set of economic phenomenon in 2020/21.

    Unemployment is rising in absolute and percentage terms. About 23 million Nigerians are now regarded as unemployed. Close to 30 million are not fully employed or engaged in jobs other than those for which they were trained. Altogether close to 60 million Nigerians are involved. An astonishing number of Uber drivers are university graduates forced to earn their living by driving taxis.

    But, the greatest challenge Nigerians will face in the next two years will be the return of essential commodities. The longer it persists, the harder it will drive inflation. If care is not taken, we might be experiencing 30 per cent or more by the fourth quarter of this year. The worker’s take home pay which now cannot take him home, might not even get him to work if fuel scarcity kicks in.

    Thank God, this is not another military government under Buhari. Otherwise, history might repeat itself again. Our women might again be horse-whipped by young soldiers.

  • Exit from recession much ado about nothing, By Dele Sobowale

    Exit from recession much ado about nothing, By Dele Sobowale

    “Nigeria’s GDP in the fourth quarter of 2020 grew by 0.11 per cent in real terms in the fourth quarter of 2020. this follows, if you will recall, two consecutive negative growth in the third quarter and second quarter of 2020, which saw the country going into recession. As a result of this fourth quarter positive growth, the total growth for the year 2020 is -1.92 per cent.”

    “It would be recalled that we had ourselves reported that we we will be going into a negative growth at the end of 2020 at -4.0 per cent…”

    Nigeria’s Mínister of Finance, Zainab Ahmed. February 24, 2020.

    The minute the National Bureau of Statistics, NBS, announced the economic results for 2020, it was clear to me what to expect from the Federal Government of Nigeria, FGN – a collection of the worst failures since independence. They would trumpet another disaster as a major achievement worthy of national celebration. What in more sane societies would be regarded as a set back would be promoted as victory. That is what is happening now. It is not surprising.

    “Existence determines consciousness; where you stand determines what you see.” Herbert Marcuse, 1898-1979.

    Marcuse was once labelled the Father of the New Left during the mid-1960s when Socialism was still regarded in some quarters as superior to Capitalism. He made that pronouncement at a lecture delivered in Boston in 1967. I was deeply stuck by its profundity and have since discovered how true it is. Failure and success are relative to what your original position was. I should have known that from my primary school days.

    In the same school with me and living in the same area were two boys – Jimi and Demola. Jimi was brilliant, he almost always came first in every examination. Each time Jimi came second or third, he received a tongue-lashing from his parents. Demola was the opposite. He was most last in the class of forty. Each time Demola managed to escape coming last, and passing the examination for the term, he received extra piece of meat. For Jimi’s parents coming second was a defeat; for Demola’s parents coming second to the last was worthy of celebration. At least, their son beat somebody.

    The Chinese President would be livid with rage if the Gross Domestic Product, GDP, growth dropped as low as 2 per cent – because Mr Xi is like Jimi’s parents. He demands excellence and would not tolerate failures. He will certainly sack the Minister who reports 0.11 per cent GDP growth. Buhari is leading the parade to celebrate Nigeria’s 0.11 per cent growth because the Nigerian President parades a cabinet full of incompetents. Like Demola’s parents, he is contented that there is something positive to report – however insignificant and misleading it is.

    Agreed, “It requires wisdom to know wisdom.” But, it also requires intelligence to understand intelligent people. A dullard can only assemble around him more dullards. The results always show.

    Jimi went on to become a Dentist; Demola struggled to finish primary school and ended as a drug dealer and addict. President Xi’s China took over 100 million out of poverty in ten years and still managed to grow by more than 5 per cent in COVID-19 driven 2020. Buhari’s Nigeria, by growing at -1.92 per cent during the same period has sent an additional 5-6 million below the poverty line. The Chinese are not bringing out drums and violins to celebrate 5 per cent because for them it is not good enough. The FGN is asking Nigerians to put on our dancing shoes on account of -1.92 per cent. That ordinarily should have been the end of commentary on the absurd 0.11 per cent growth in Q42020 for which Buhari and his gang are losing their heads in joy. But, there is more to the 0.11 per cent and -1.92 per cent which reveal to what extent these deceitful people would go to promote falsehood and propaganda.

    “Oh what a tangled web we weave/ when first we practice to deceive.”

    Sir Walter Scott, 1771-1832, VANGUARD BOOK OF QUOTATIONS, P 35.

    Even on the face of it, what the Finance Minister released could not by any stretch of imagination be regarded as something worthy of commendation. Why, for instance should Nigerians be happy that instead of their self-projected -4.0 per cent, we ended with only -1.92 per cent? Does it mean more money in our pockets or more employment opportunities for the jobless? Certainly not. What Ms Zainab Ahmed is saying amounts to “thank us for all the damage we could have done but didn’t.” Small comfort that is to us.

    Furthermore, it is surprising that the Minister has not learnt that the fourth quarter is always more active than all the others. Starting from November 1, preparations for Christmas and New Year increase the economic tempo – irrespective of what governments do or don’t do. Up to seventy per cent of the sales of some products and services occur at year end. People travel more; spend more and generally push Q4 GDP up above those of Q2 and Q3. These FGN is so lacking in any demonstrable economic achievement, it might even ask us to say “thank you” because the sun was shinning. Still, that is not all to this nonsense.

    REMEMBER ERGP AND THE 2020 BUDGET FIGURES

    “Better by far you should forget; than that you should remember and be sad.”

    Christian Rosseti, VBQ p 63.

    Area Boys know the trick. It is all about selective remembering and selective forgetting. You tell your listeners what would make them happy; and keep those likely to bring the roof down on you. When the Minister repeated twice “if you recall” and “it would be recalled”, she was setting us up for what would make us feel good. Nobody knows better than her that there are other things to recall which should make us tremble with fear. The promises made when launching the ERGP and the 2020 budget are two that can be accommodated today. Get your handkerchief ready – if you have tears to shed.

    Economic Recovery Growth Plan, ERGP, was launched in April 2017 by Vice President Osinbajo with loads of empty promises and illusions. It was supposed to cost $245 billion; create 15 million jobs, last four years, grow GDP by 4 per cent in 2017 and 7 per cent in 2020. Except for the fact that four years have elapsed, which of the other promises were fulfilled?

    The GDP growth for 2020 is of particular interest now. We were told to expect 7 per cent growth in 2020. We got -1.92 per cent. And Buhari’s government want us to start dancing. Is their own Nigeria a nation of lunatics?

    Even the 2020 Budget promised 3 per cent GDP growth by December 2020. See what we got. How can a government which recorded such negative variances – Budget 2020 -4.92 per cent, ERGP -8.92 per cent – have the nerve to be celebrating all these calamities and ask us to join?

    Jimi and Demola stand as metaphors for Xi and Buhari. One insists on excellence and his nation moves millions out of poverty each month. The other gathers those who cannot possibly deliver on promises and he is happy with 0.11 per cent Q4 GDP growth. He creates more bandits who will kidnap more school children and send more kids away from school. The spiral of worsening poverty and violence has been unleashed. And, they clap?

    Hell is here. It requires commonsense to understand that a nation cannot condone poor performance for a long time and survive. Where is common sense?

  • How Nigeria survived, exited second recession despite COVID-19 – Minister

    How Nigeria survived, exited second recession despite COVID-19 – Minister

    The Minister of Information and Culture, Alhaji Lai Mohammed, says Nigeria did not exit the latest recession by accident, but with “hardwork, foresight and deliberate planning by government.”

    The minister stated this on Saturday when he featured on a monitored Channels Television programme.

    TheNewsGuru.com, TNG reports that Nigeria slipped into recession for the second time in four years in the midst of COVID-19 after the country’s Gross Domestic Product (GDP) declined for the second consecutive quarter in 2020 (Q2 and Q3)

    The economy, however, came out of the recession in the fourth quarter as growth in agriculture and telecommunications had offset a sharp drop in oil production.

    The GDP grew 0.11 per cent in the three months through December from a year earlier, compared with a decline of 3.6 per cent in the third quarter as announced by the National Bureau of Statistics.

    Mohammed said exiting the recession occasioned by the COVID-19 pandemic was not accidental.

    He recalled that President Muhammadu Buhari had last year set up the Economic Sustainability Committee which came up with Economic Sustainability Plans to mitigate the effects of COVID-19.

    “When you talk of GDP, it is the total sum of the value of your services and goods. Clearly, if there is a lockdown, you cannot go to work, and there is bound to be a recession.

    “What we did was that we pumped money into the system by creating jobs.

    “The first is the1,000 jobs through public works given to each local government and we have 774 Local Government Councils.

    “So, we have 774,000 workforce engaged on public works like road and this goes a lot in boosting the economy,’’ he said.

    Mohammed said government equally introduced the Survival Fund which the Federal Ministry of Industry, Trade and Investment supervised to prevent loss of jobs and create new ones.

    The Survival Fund, according to the minister, was to ensure that Small and Medium Scale Enterprises did not collapse.

    “With Survival Fund, we asked for companies that employ between five and 50 people and we gave them payroll support for about three months.

    “About 500,000 MSMEs benefitted from this programme,’’ he said.

    The minister said the government also gave One-Off-Grant whereby N10,000 was given to each of 233,000 artisans,including hairdressers and mechanics.

    He said some other programmes introduced by government included Conditional Cash Transfer with 3.6 million beneficiaries as well as N-POWER, TRADERMONI, FARMERMONI, MARKETMONI which reaches millions of people.

    Besides the survival plans and economic sustainability plans, he said the government is investing heavily in infrastructure and employing more people.

    The minister said that the government is doing more with less resources, adding that the effects of the pandemic was not peculiar to the country but a global affair.

    He said no fewer than 40 million Americans are now out jobs and some cannot pay their mortgage due to the pandemic.

    “In Nigeria, our major sources of revenue are crude oil and taxation.

    “Crude oil is just inching up but we also suffered a decrease in production from 1.72 million barrels a day to 1.67 million barrels daily losing about half a million barrels daily.

    “In the last 12 months, officers from grade level 12 and below are working from home and this has a significant effect on the economy.

    “In spite of these, we still have to contend with other major challenges like insurgency, banditry and kidnapping; therefore we must understand and admit that the country is going through a lot,’’ he said.

    The minister also identified the challenge of population explosion, explaining that being a delicate issue to legislate on, government can only deploy advocacy for its control.

  • BREAKING: Nigeria exits recession, records 0.11% growth in Q4

    BREAKING: Nigeria exits recession, records 0.11% growth in Q4

    The National Bureau of Statistics (NBS), says Nigeria’s GDP grew by 0.11 per cent in Quarter Four (Q4) 2020, from the 6.11 per cent contraction in Q3, signaling a gradual recovery from recession.

    TheNewsGuru.com, TNG reports that the economy slipped into its second recession in five years in November 2020 as the gross domestic product contracted for the second consecutive quarter.

    The NBS said this in the Nigerian Gross Domestic Product (GDP) Report (Q4 and Full Year 2020) released on its website on Thursday in Abuja.

    The bureau said this represented the first positive quarterly growth in the last three quarters.

    “Though weak, the positive growth reflects the gradual return of economic activities following the easing of restricted movements and limited local and international commercial activities in the preceding quarters.

    “As a result, while the Q4 2020 growth rate was lower than growth rate recorded the previous year by –2.44 per cent, it was higher by 3.74 per cent compared to Q3 2020.

    “On a quarter-on-quarter basis, real GDP growth was 9.68 per cent indicating a second positive consecutive quarter-on-quarter real growth rate in 2020, after two negative quarters,” the report noted.

    The NBS said overall, in 2020, the annual growth of real GDP was estimated at –1.92 per cent, a decline of –4.20 per cent when compared to the 2.27 per cent recorded in 2019.

    It said in the quarter under review, aggregate GDP stood at N43.564 billion in nominal terms.

    This performance, the bureau said was higher when compared to Q4 2019, which recorded a GDP aggregate of N39.577 billion, representing a year-on-year nominal growth rate of 10.07 per cent.

    The NBS classified the Nigerian economy into the oil and non-oil sectors.

    For the oil sector, in Q4, an average daily oil production of 1.56 million barrels per day (mbpd) was recorded.

    This was lower than the daily average production of 2.00 mbpd recorded in the same quarter of 2019 by -0.44 mbpd and Q3 2020 by –0.11 mbpd.

    It added that real growth of the oil sector was –19.76 per cent (year-on-year) in Q4 indicating a decrease by –26.12 per cent relative to the rate recorded in the corresponding quarter of 2019.

    “Growth decreased by –5.87 per cent when compared to Q3 2020, while quarter-on-quarter, the oil sector recorded a growth rate of –26.27 per cent in Q4.

    “For 2020, the oil sector grew at –8.89 per cent compared to 4.59 per cent in 2019,” the report stated.

    It added that the oil sector contributed 5.87 per cent to total real GDP in Q4, down from the corresponding period of 2019 and the preceding quarter, where it contributed 7.32 per cent and 8.73 per cent respectively.

    The nation’s non-oil sector grew by 1.69 per cent in real terms in Q4 2020, slower than the 2.26 per cent recorded in the corresponding quarter of 2019, the NBS said.

    It, however, said it was better than the –2.51 per cent growth rate recorded in the preceding quarter.

    The NBS added that for the full year of 2020, the non-oil sector grew by –1.25 per cent compared to 2.06 per cent in 2019.

    It said said growth in the sector was driven by information and communication (Telecommunications and Broadcasting).

    Other drivers were agriculture (crop production), real estate, manufacturing (food, beverage and tobacco), mining and quarrying (quarrying and other minerals) and construction, accounting for positive GDP.

    “In real terms, the non-oil sector contributed 94.13 per cent to the nation’s GDP in Q4 2020, higher than the share recorded in Q4 2019 (92.68 per cent) and Q3 2020 (91.27 per cent).

    “For 2020, the non-oil sector contributed 91.84 per cent to real GDP, higher than 91.22 per cent recorded in 2019,” the NBS report said.

    The bureau explained that Quarterly National Accounts (QNA) were an integrated system of macroeconomic accounts designed to describe the entire system of production in a nation on a quarterly basis.

    They provide a picture of the current economic status of an economy on a more frequent basis than Annual National Accounts (ANA).

    In providing a reasonable level of detailed information of the economy, QNA allows the government to regularly access, analyse and monitor economic developments.

  • U.S. economy recession worst performance since 1946 -Report

    U.S. economy recession worst performance since 1946 -Report

    The U.S. economy contracted at its sharpest pace since World War 11 in 2020, as COVID-19 ravaged services businesses like restaurants and airlines, throwing millions of Americans out of work and into poverty.

    The economy contracted 3.5 per cent in 2020, the worst performance since 1946.

    That followed 2.2 per cent growth in 2019 and was the first annual decline in Gross Domestic Product (GDP) since the 2007-09 Great Recession. The economy plunged into recession last February.

    A report on Thursday from the Commerce Department’s snapshot of fourth-quarter GDP showed the recovery from the pandemic losing steam.

    This comes as the year wound down amid a resurgence in coronavirus infections and exhaustion of nearly three trillion dollars in relief money from the government.

    The Federal Reserve on Wednesday left its benchmark overnight interest rate near zero and pledged to continue injecting money into the economy through bond purchases.

    It showed “the pace of the recovery in economic activity and employment has moderated in recent months.”

    President Joe Biden has unveiled a recovery plan worth 1.9 trillion dollars, and could use the GDP report, the survey said.

    Biden is expected to lean on some lawmakers who have balked at the price tag soon after the government provided nearly 900 billion dollars in additional stimulus at the end of December.

    In the fourth quarter, GDP increased at a 4.0 per cent annualised rate as the virus and lack of another spending package curtailed consumer spending.

    The pandemic partially overshadowed robust manufacturing and the housing market. GDP growth for the last quarter was in line with forecasts in a Reuters poll of economists.

    The big step-back after a historic 33.4 per cent growth pace in the July-September period left GDP well below its level at the end of 2019.

    With the virus not yet under control, economists are expecting growth to further slowdown in the first quarter of 2021, before regaining speed by summer as the additional stimulus kicks in and more Americans get vaccinated.

    The services sector has borne the brunt of the coronavirus recession, disproportionately impacting lower-wage earners, who tend to be women and minorities.

    That has led to a so-called K-shaped recovery, where better-paid workers are doing well while lower-paid workers are losing out.

    The stars of the recovery have been the housing market and manufacturing as those who are still employed seek larger homes away from city centres.

    The stars of the recovery also have been the buying of electronics for home offices and schooling. Manufacturing’s share of GDP has increased to 11.9 per cent from 11.6 per cent at the end of 2019.

    A survey last week by professors at the Universities of Chicago and Notre Dame showed poverty increased by 2.4 per cent points to 11.8 per cent in the second half of 2020, boosting the ranks of the poor by 8.1 million people.

    Rising poverty was underscored by persistent labour market weakness. In a separate report on Thursday, the Labour Department said 847,000 more people filed new claims for state unemployment benefits last week.

    The economy shed jobs in December for the first time in eight months. Only 12.4 million of the 22.2 million jobs lost in March and April have been recovered.

  • Leadership: Addressing the Challenges of a Recession, By Dr Alim Abubakre

    Leadership: Addressing the Challenges of a Recession, By Dr Alim Abubakre

    While the COVID-19 pandemic has caused a virulent recession in many countries globally, Nigeria’s case is a much direr. Even before COVID-19 struck, Nigeria was already suffering from the adverse consequences of collapsing oil prices. Hence, without effective and impactful strategic leadership, the virus could aggravate the pain of an already hard-biting recession.

    For organisations that are not dynamic, responsive and agile, the effects of the recession are likely to continue hurting their performance into the foreseeable future and threaten their existence. Some of the many challenges that organisations are facing include a high level of inflation and insecurity. Other stumbling blocks include fluctuations in forex, low customer demand, high operating costs, negative GDP, dwindling business and government revenue, loss of critical talent due to unavoidable redundancies and, of course, diminishing productivity due to low levels of morale among staff.

    Without a doubt, being a leader during such a challenging period of great uncertainty is a challenge in itself and also an opportunity to make a profound impact and consolidate one’s legacy. It is a time, not only to work hard, but also to be strategic and ensure that one remains optimistic even when the going seems to be getting worse. For someone who has been in leadership for long, experience may offer some perspectives, but these are unprecedented times and solutions of the past may not suffice. Also, what about those new in management positions? For organisations to win in these times characterised by severe socio-economic crises, they need strategic leadership.

    Importantly, organisations need viable strategies that can help you manage the challenges that your organisation faces during such unprecedented times and turn it into opportunities. After all, companies such as GE, Disney, FedEx and IBM were all founded during recessions and DHL, Amazon and Netflix are all currently doing well despite their higher cost of operations and their increasingly disruptive and turbulent operating landscape. Here are some strategies that you can implement to succeed:

    Establish Strategic Priorities

    Dwight D. Eisenhower, the 34th President of the United States from 1953 until 1961, said: “I have two kinds of problems, the urgent and the important. The urgent are not important, and the important are never urgent”. This quote underscores the importance of prioritising and advance planning. Thus, if one were to ask Eisenhower who was the Allied Forces Supreme Commander during World War II, NATO’s first supreme commander and who successfully navigated NATO and the USA through uncertain times; how can you achieve your diverse goals in these fast-paced and turbulent times? His response is likely to be that not all activities are necessary. So, when sailing through hard economic times, identifying priority areas and therefore, the ability to develop the strategy and implement it to reflect the set critical direction is what separates those who succeed from those who fail.

    It is, therefore, imperative for leaders to determine and clarify their strategic priorities. What priority areas mean here is that you need to identify those essential activities that you must do to survive and succeed. So, those that are important but not urgent can be scheduled for another time, those that are urgent but not important can be delegated while those that are important and urgent should go on.

    But how do you ensure that this is implemented? Well, you need first to identify critical organisational vulnerabilities and address them as well as ensure that your senior leadership team is aligned to this priority. Then stay fully informed about the happenings within and outside your industry. Follow trends and changes that you can attribute to the recession. Your focus here should be responding appropriately to changes in demand for your goods/services, as well as the behaviour of your stakeholders (e.g. customers, regulators, investors and competitors). Recession hits both at a micro, intermediate and macro level, so understand how the economy is affected as well as the impacts on your stakeholders and how you can effectively and efficiently unlock scarce value.

    Manage Finances and Cash Flow Carefully

    Recession significantly affects sales, revenue and profits. One way to manage its effects as a leader is to monitor your expenditure, earnings and cash flow carefully. Explore innovative expenditure solutions, for example, instead of outright purchase can you lease? Another could be, after weighing the cost of switching and if it is not too high, in place of using big service providers such as courier and IT providers that have substantial operational costs, could smaller firms be a suitable replacement?

    If you could offer incentives such as discounts for advanced payments and use of electronic remittance to receive sales revenue faster, this could be a means of reducing default risks. It would help if you could explore all business lines of credit locally and internationally including business credit cards even before you need them. -Explore the use of inventory and a percentage of account receivables as collateral. Most importantly, ensure that your spending is only limited to the most critical areas that you need to focus on to keep your organisation going despite the harsh financial/economic environment. Can you cut on utility, rent or renegotiate on terms of loans?

    Keep Your Staff Informed of Your Current Situation

    One of the ways to sail smoothly through turbulent economic times is to keep your team informed and optimistic about the future. However, this is often hard since some of your staff members are likely to exit to find employment elsewhere, feel insecure or even engage in private activities. You might also want to downsize and lay off some of them to keep costs as low as possible.

    As you tighten staffing levels, note that there are key people that you cannot afford to lose. So, the best way to act is to make any necessary redundancies all at once then make sure that all key people are motivated by listening to them, involving them in solving problems, celebrate any progress made and appreciate your team. It is not just enough to keep them. You also need to train those who remain with the organisation to keep their morale high and help you keep the organisation going despite the difficult situation.

    Keep Your Customers Satisfied and Happy

    Customer satisfaction is what creates the difference between organisations that survive and those that thrive-. Ideally, when customers are satisfied with your services, they tend to share their experiences with friends. Eventually, those friends of theirs will end up as your customers too if they are happy with what you offer them.

    Note also that satisfaction finally turns into loyalty, but customer loyalty is difficult to maintain during an economic downturn. Thus, leaders need to safeguard necessary investment in marketing to ensure top of mind awareness, as well as emphasise brand proposition, build brand trust and recognition. All these functional strategies and tactics are fantastic ways to reduce business risk, stabilise the brand, assure the long-term health of the brand, capture market share from weaker competitors and achieve loyal customers, even in these challenging times. With a devoted team of customers, surviving and winning in the current and even future recessions won’t be hard. Also, through research and customer service, Leaders need to ensure that their organisational products and services exceed the expectation of their customers in terms of functionality, delivery time and after-service support. Explore multiple platforms for your organisation to stay in close contact with your customers offline as well as online and find ways of meeting and exceeding their needs. Leaders need to ensure that their organisations are sharing reassuring messages, demonstrating genuine empathy to customers and reinforcing emotional connection.

    Seek Opportunities Home and Away

    The impact of a recession is not uniform across the world. Some parts will often suffer more than others in such instances. It, therefore, makes sense to market your organisation across the borders, so you have opportunities home and away.

    One way to expand your scope across the borders is through seeking relevant areas where you can innovate and get new clients. The Africa Free Trade Agreement offers some opportunities to expand to other neighbouring countries which you are not presently operating in-this may require a different business model in such contexts such as selling to the bottom of the pyramid. As long as what you are doing is earning you something, do not despise it, the question mark of today may be the cash-cow of tomorrow.

    In a nutshell, providing exceptional leadership during a recession is not an easy task. It calls for resilience, serious restructuring of operations, scaling down of some activities, making redundancies, empathy and most importantly, keeping your customers and other stakeholders happy since you need them not only for survival but to thrive. If you can manage all these, you are no doubt going to sail through and emerge victoriously.

     

    Dr Abubakre is a British based entrepreneur with an unparalleled passion for Africa, academic, and Founder & Non-Executive Chair of TEXEM, UK which has trained over 4,000 executives in the UK and Africa in the past ten years. He is on the advisory board of the London Business School Africa Society, lectures in Coventry, a top 15 UK university. In 2010, Alim was selected as one of the top 100 Virgin Media emerging entrepreneurs in the UK, and accompanied London’s Lord Mayor on his entourage to Nigeria in 2015. Abubakre is a Fellow (FIOEE) of the UK’s Institute of Enterprise and Entrepreneurs and a Senior Fellow of the Higher Education Academy.

  • Recession 2020: The present is bad, future bleak – Dele Sobowale

    Recession 2020: The present is bad, future bleak – Dele Sobowale

    By Dele Sobowale

    By now every Nigerian knows the truth. Nigeria is in a recession. The dreadful result was summarised for us this way in PUNCH, November 22, 2020.

    “The NBS, in its Gross Domestic Product report for Q3, said the GDP, the broad measure of economic prosperity, fell by 3.62 per cent in the three months till September.

    For the first time in more than three years, the Nigerian economy shrank in Q2 by 6.10 per cent..”

    For good measure, the World Bank added two bits of information to make the situation in which Nigerians find themselves even more depressing. First, the bank pointed out that this is the worst recession in 36 years.

    Second, the global bank followed that up by telling Nigerians that per capita income this year and early next year could fall to 40-year low. For a nation the acknowledged poverty capital of the world things cannot possibly be worse for us. It not only means that we will not soon relinquish the title of poverty capital, we only have our own dismal record to beat. And, all these could impliedly occur in the near future – as early as next year in fact.

    A RECESSION FORETOLD IN MARCH 2020.
    “For every folly of their [rulers], Nigerians feel the lash.”
    Horace, 65-8 BC, VBQ p 61.

    Grim as all these revelations might appear to Nigerians, they represent a tragedy already foretold, as usual by VANGUARD. While the rest of Nigeria was still wondering what would be the repercussions of COVID-19 on the Nigerian economy, we already made the forecast of a recession. As usual, please read what we published in March.

    COVID-19 HAS CLOBBERED BUDGET 2020 INTO A COMA.
    “Coronavirus: FG Considers Reviewing 2020 Budget.
    “DAILY INDEPENDENT, March 5, 2020, p 1.
    “55 Nigerian oil cargo unsold as demand tumbles.”
    PUNCH, March 6, 2020, p 23.

    Shakespeare, 1564-1616, must have had a situation like the one in which Nigeria now finds itself before pronouncing that: “All things do help the unhappy man to fall.” (VANGUARD BOOK OF QUOTATIONS, VBQ p257). President Buhari during one of his many trips abroad – on private visit, of course – once described himself as the most unhappy leader. He has a right to claim that title. Nigeria under him became the poverty capital of the world and that is a title that will not be relinquished soon. On four indices included in the Misery Index, MI — children out of school, maternal death, infant mortality and per capita income – Nigeria is ranked first in all of them.

    Nigeria is also home to two of the world’s five worst terrorist groups. Bioko Haram and Fulani Herdsmen have ensured that Nigeria is not only represented but has managed to record more casualties of terrorism than some of the countries now officially at war.
    ……, although it is the poorest country among the Organisation of Petroleum Exporting Countries, OPEC, and it is only the eight largest producer, more crude oil is stolen in Nigeria than any other country. Thus, the Federal Government of a nation which needs every dollar it can get from cured oil stands and looks on while a few selfish but powerful crooks consign the rest of Nigeria to prolonged poverty and endless destitution. None of the big oil thieves living in Abuja and Lekki/Victoria Island has been apprehended and prosecuted. Instead of protecting our own most important source of funds, we are contented to make requests for $22 billion loan package – which a rubber stamp Senate readily approves. Yet, nobody in the Senate seriously believes that the jumbo loan will solve our economic problems. Most likely, most of it will be embezzled, The Buhari administration, by the time it leaves office in 2023 will leave the next generation with more debt to repay than any other government in history.

    Those observations are meant to provide readers some background to what will follow in this article because Nigerians need to understand the disaster that awaits us on account of COVID – 19 and our near total dependence on oil. Perhaps the place to start is what was predicted last year when the 2020 Budget was presented to the puppet National Assembly, NASS. Having successfully planted his stooges in the two chambers as Senate President and Speaker, Buhari was certain that the budget would be passed as it was. He was right. NASS dutifully passed the 2020. Unfortunately for Buhari, the NASS and Nigeria, the demand for crude was less than expected right from January 1, 2020. It remained low through out the second month of the year and as we move into March, we discover that Coronavirus – 19, COVID-19, has rendered Budget 2020 totally untenable.

    BUDGET OF DECEIT AND SELF-DELUSION
    “The most obstinate illusions are ultimately broken by facts.”
    Trevor Roper. VANGUARD BOOK OF QUOTATIONS, VBQ p 100.
    “Budget of Continuity was based on a benchmark oil price of $60 per barrel, oil production of 2.3mbpd…government projected a deficit of N1.91tn…The revenue performance is only 58 per cent of the 2019 budget’s target due to the underperformance of both oil and non-oil revenue sources…Specifically oil revenues were below target by 49 per cent as at June 2019.”
    President Buhari, Budget 2020 presentation to the NASS, October 8, 2019.”
    That was President Buhari’s Budget summarised. Below was my own reaction to it at the time. I never expected the FG to listen to warnings from others.
    STARTING ON THE WRONG FOOT; STAYING ON THE WRONG TRACK
    “Morning shows the day” according to an old adage.

    The disaster of the 2020 Budget actually had its origins in 2015. The first three appointments every modern Head of Government makes in today’s global village are: the Ministers for Defence, Finance and External Affairs. Those are the people other countries appraise most critically. And, the appointments are made very quickly after elections are over. Bearing in mind that “A week is a long time in politics” (Harold Wilson, British Prime Minister 1970s). Buhari waiting for five months to make those key appointments had already sent a signal to the global community; and not a good one. To then turn around and hand the economy to people totally unknown in global financial institutions for the five months sent another signal; a worse one. When he finally made the selection of Minister of Finance, it was to please a political loyalist instead of picking some one with network in the international financial community. Mrs Adeosun might be a good accountant; but, she is not and cannot be an excellent Finance Minister. The results showed very quickly. A recession followed in 2016.”

    The rest of the analysis of the 2020 Budget went on to predict that it will never be implemented as it is. That was before COVID-19 gate-crashed into our lives and is now going to cause a lot of havoc to the budget of every country on the planet. The first signal of the problems ahead is the turmoil in global oil trade. The Organisation of Petroleum Exporting Countries, OPEC, is now in disarray. Saudi Arabia, the largest exporter, after failing to get Russia, a non-member to agree to a cut in production and supplies, had unilaterally reduced crude price and is now set to increase output. Those steps spell economic doom for countries like Nigeria which are more heavily dependent on oil. From the evidence available at the moment, the average price of crude oil on the global market is unlikely to exceed $50 per barrel for the next three months unless an emergency meeting of OPEC is held to establish anew quota and production level acceptable to all members.

    Even then, any agreement by OPEC members will not be binding on non-members – who now control a larger percentage of global oil output than OPEC. The cartel has lost the clout which in the past made it possible to dictate global oil prices. While there are several uncertainties, there is one certainty, which cannot be ignored. COVID-19 has devastated Nigeria’s 2020 budget. It was not realistic before COVID-19; it is totally in shreds now. It requires no high intelligence to realise that a budget review is urgently needed.

    BUHARI APPOINTS BUDGET REVIEW ADVISERS.
    For once President Buhari did not waste time in approving a budget review committee of advisers. That is a step in the right direction. Other steps must necessarily follow – and quickly too because time is one of the variables they must bring into consideration. In that connection the most important matters to be decided include the following:

    Bench mark crude price to adopt in the recommendations for the budget review.
    Time to start operating the new budget.
    The impact on the Federal and State Governments.
    How to handle the inevitable recession.
    In the second part of this series, I will elaborate on the four issues listed above. But permit me to be the bearer of bad news. ANOTHER RECESSION IS LOOMING ON THE NIGERIAN ECONOMIC ENVIRONMENT.”

    That was published in the second week of March – long before the FG started to address its mind to the possibility of a recession.

    I would have been shocked to death if the Buhari administration, had read the article and taken it seriously as a warning against imminent catastrophe. Predictably, they did not. Still, at the time the article was released, we were still under the impression that we had a serious government which would weigh all the evidence provided and act proactively. Though inevitable, if the Federal Government had reached out for more information from us, it would have been able to reduce the decline in GDP growth considerably. Second quarter might not have slumped to -6.10 per cent and Q3 not as bad as -3.62.
    Now, Nigerians are getting set to feel the lashes of incompetence and gross dereliction of duty by the government they elected. It will be brutal.

    HOW WE GOT HERE
    “Be careful what you pray for; you might just get it and regret it.” Irish advice.
    Right after the time the All Progressives Congress, APC, was formed, the political party proclaimed CHANGE as it new mantra. Nigerians, without asking for the specific meanings of the promises implied fell for the slogan. On Election Day 2015, the country’s voters opted for the change. The transition from slogan to reality has since proved to be an economic nightmare for all concerned.
    The President-elect turned out to be totally different from all the newly-elected Presidents, worldwide, before and after him. American President-elect Joe Biden, will not resume until January 20, 2021. Today, just three weeks after he won the US election, he has nominated the most important members of his cabinet – especially the Treasury Secretary. Macron of France and Prime Minister Mordi of India were even faster. They announced their cabinets within three days after being declared winner. That is the way modern Presidents operate in the new millennium.

    Nigeria’s change agent, President Buhari was different. He not only wasted all the time between the declaration of results and inauguration on May 29, 2015, by not selecting his cabinet, he kept the nation and the global community waiting for five months until October 2015 to present the lowest quality cabinet Nigeria has ever had since his equally low quality cabinet as Military Head of State in 1984-5. That 1984-5 cabinet also got Nigeria into recession in 1984; and was on course to repeat it in 1985; just as his cabinets for 2015-2019 and 2019-2020 have provided an encore by getting us into two recessions.
    That change from modern to slow and ancient in a world where national fortunes change within hours was the beginning of the series of administrative blunders which would have serious economic consequences for Nigeria.

    When the cabinet list came, it contained 44 Federal Ministers. Our readers are requested to follow closely the number of people on Biden’s US cabinet. The number will not exceed fifteen. Nigerians should be asking “if the world’s richest nation, bigger than Nigeria in all respects and with far greater global responsibilities, can be governed with 15 Ministers, what is Nigeria, under Buhari doing with 44?” And, are we getting value for the huge expenses involved in maintaining a Minister in office? Most Nigerians will readily agree we are not.

    Granted, Buhari met bloated cabinets as the norm. But, would not positive change have dictated he reduced the number significantly? Even if the government had insisted on obeying the Nigerian constitution which calls for appointment of a Minister in each state, couldn’t an imaginative President have found a way round it? For instance, he had ill-advisedly kept the Ministry of Petroleum for himself. By so doing, Katsina State is already represented on the cabinet. Why make other appointments from Katsina? For four years, Vice President Osinbajo was in charge of the Social Investment Programme. Why not put him in charge of the Ministry for Humanitarian Services and dispense with another Minister from Ogun State?
    There is no need to list seriatim all the top level positions which could have been elevated to cabinet rank and we could have less than 30 Ministers. The cardinal reasons we have 44 Ministers on government’s payroll are lack of imagination and a culture of waste which Buhari brought into government in 2015. The results are startling and frightening at the same time. This government, if things continue like this, will destroy us before it departs in 2023. Take a look at the graph below.

    Jonathan’s administration, despite its enormous faults, at least left us with an economy which in 2014 grew faster, 4.8 per cent, than the projected population at 3 per cent per annum. Five months of Jonathan’s administration provided the economic stimulus which kept GDP growth slightly ahead of population increase in 2015. That has been the last time the economy grew faster than population. Then CHANGE took over and we are now being steadily but inexorably ruined as a nation. Whoever took over from Buhari will inherit a total wreck because this government cannot alter the trajectory of the nation’s economic development on its own. And, they refuse to seek help.

    Since 2016, low annual growth had brought with them all the maladies associated with economies in distress – rising unemployment, crimes, suicides, malnutrition, infant mortality and deepening poverty. The recession of 2016 marked the beginning of a CHANGE in the fortunes of Nigeria’s economy. Historians of the future will remember this as our darkest years – with no light at the end of the tunnel. COVID-19 merely accelerated and intensified a process which would have resulted in protracted annual low GDP growth followed by recession which would wipe off all the gains made in thirty-five to forty previous years. In 1980, a secondary school teacher could afford to replace an old car with a brand new (“tear rubber) one. Today, a Permanent Secretary must embezzle huge funds to procure a ten year old jalopy. That is CHANGE, for which we voted. We will all live to regret it.
    WHERE WE STAND NOW.

    “Hell hath no limits;, nor is it circumscribed in one self place, for where we are is hell…’ Christopher Marlowe, 1564-1594, VBQ p 89.

    Food insecurity and famine now assured.
    For Nigerians living today, the closest thing to hell is here. For millions of our people, especially rural subsistence farmers, hell is definitely here. Hell is here, not only because COVID-19 might trigger another lockdown, but because the criminals – herdsmen, kidnappers, cattle rustlers and bandits – which the Federal Government handled with kid gloves, for ethnic and religious reasons, have now shut down a significant percentage of Nigeria’s farmland.

    of our annual food production. Today, even two battalions of soldiers cannot guarantee the safety of farmers and their harvests in Borno State where the Governor had escaped two assassination attempts. In Zamfara and Katsina states, the Governors openly announce their negotiations with bandits in order for farmers to be allowed to work in peace. Invariably, the armed hoodlums break their promises and attack farmers all the same. The recent kidnap of several senior police officers, on their way to Gusau, at the border of Katsina and Zamfara states, has revealed to Nigerians what ordinary people suffer on those routes.

    The atrocities committed daily on the Abuja-Suleija-Kaduna highway only tells some of the story of food high-jacking by bandits in Kaduna and Niger States. Going to farm in many parts of the North has become a suicide mission; none but the bravest and most desperate now attempt it anymore.
    Chief Olu Falae, former Secretary to the Federal Government, former Minister of Finance serves proxy for all farmers in the South besieged by Fulani herdsmen covered with immunity from the top by the Life Patron of the Miyetti Allah Cattle Breeders Association of Nigeria, MACBAN. When MACBAN mebers first started invading farms, destroying crops, killing and kidnapping people, the Federal Government not only turned a blindeye to the crimes. The FG actually admonished the victims for not welcoming strangers in their midst. It was a colossal lie of course. Herdsmen had been visiting Chief Falae’s part of the South from time immemorial without creating havoc. The CHANGE came in 2015 when the hitherto docile herdsmen openly dropped their shepherd’s staffs and picked up AK-47. Chief Falae was kidnapped and ransom was paid and nobody was apprehended for it. A few days before I started to write this special report, herdsmen devastated parts of Chief Falae’s farm once again. If Chief had depended exclusively on farming for his livelihood herdsmen would have forced him to stop farming as hundreds of thousands had done in the South.
    When the FG was shielding criminal hersmen, it never occurred to anybody in Aso Rock that widespread famine would result. Large scale famine is now a reality with which the government must now deal. It will remain with us for a while because it is easier to destroy than to build. Millions of Nigerians have been forced to leave farms they have taken years to cultivate and turn into food machines for all of us. Short-sightedness at the top of government was certainly a CHANGE – again, perhaps not what we expected in 2015.
    Feathers fly in Poultry Sector
    “Feed scarcity: Poultry investors divest, sell off birds.” PUNCH, November 25, 2020 P 18.

    When herdsmen were allowed to invade maize farms with impunity, bandits seize harvests, kidnappers carry off farmers on the way to or from farm – all without response by security agents — it requires very little intelligence to realise that food scarcity would be the ultimate outcome. Top officials of the FG attempted to make up the difference by issuing preferential maize import licence to their kinsmen. It was a futile effort because the supply still fell far short of demand. At any rate, resorting to imports to fill the gap fails to address the fact that we have suffered a reversal in our march towards maize self-sufficiency. Henceforth, we will continue to import increasing quantities of grain for poultry feed. Without that the sector will continue its decline.
    Boomerang on Cattle

    “Life sometimes does not move in straight lines; it is more like a boomerang.”
    Members of MACBAN and their sponsors who might be operating under the illusion that they suffer nothing from their atrocities are in for a shock. The devastation of farms and the impoverishment of millions of farmers has contributed in large measure to the current recession. As aggregate personal income has plummeted with the recession, the demand for meat has also dropped sharply. Shortly after receiving call from the Sunday Editor to write this article, Head Butchers in seven Lagos markets were contacted to ask about demand for beef, goat and ram meats. The result was startling. On the average, there has been about 25 per cent drop in cows, goats and rams slaughtered and sold. A stop at the cattle market – Kara – revealed that there is a strong correlation between what the butchers reported and the reduction in cattle sold.

    Lagos cattle dealers are now sending back cattle. The tragedy has come full circle.
    Unfortunately, reduced demand is not the only problem facing herdsmen. Some of the cattle rustlers carrying off their animals were once farmers whose farms were devastated by herdsmen. Information reaching us indicates that some displaced farmers are now imposing a sort of rural jungle justice – herdsmen destroy farms; farmers seize their cattle in retaliation. Paradoxically, the cattle rustlers have discovered that it is more profitable to rustle cattle than to farm. Few of them will return to farming until governments find a way to restore security to rural areas.

    Agriculture, which was always the first sector to lead economic recovery after a recession, might not play that role now. The sector has been devastated as never before. Consequently, food prices will now continue to rise until further notice.

    We are in deep trouble because we have ignored one of the abounding lessons of history. “Burn down your cities and leave your farms; and your cities will spring up again as if by magic. But destroy your farms and the grass will grow in the streets of every city in the country.” (William J Bryan, 1860-1925).
    We have almost destroyed our farms.

    Manufacturing

    “Consumption is the sole purpose of production.”
    This is an axiom in economics which pertains more to manufacturing than any other sector. Despite its importance, it will be touched only briefly in this write up. The situation here is not different from that in agriculture. The present is precarious; the future scary. Warehouses are full of finished products – unsold; and selling slowly. The demand for manufactured goods naturally lags behind request for food. With most Nigerians struggling to feed; demand manufactured goods have been very weak and will probably remain so for a while.

    Hospitality/Entertainment

    This sector was simply wiped out during the lockdown. Many of the investors might never recover. And just as some people were looking towards the Yuletide to at least re-open shop, another lockdown is threatened. Millions of Nigerians have lost their jobs from the first lockdown. Another one will dash all hopes of getting re-engaged any time soon.

    Remittances from Nigerians abroad

    Close to twelve per cent of foreign exchange coming into Nigeria is from legal and illegal remittances. The foreign exchange coming through that source has helped to moderate domestic exchange rates. Global COVID-19 and universal lockdown had dealt a mortal blow to remittances. Nigerians abroad who were just barely surviving had little left to send home.
    Round two of global lockdown means that Nigerian recipients of money from abroad are in for a tough time in the early months of 2021 at least.
    IMMEDIATE FUTURE IS BLEAK.
    “There are no desperate situations; only desperate men.
    Joseph Goebbels, 1897-1945, VBQ p 38.

    Worldwide government officials are desperate as this year’s global recession appears likely to continue till at least the first half of next year. Aggregate demand for crude will remain low; so will the average price. Nigeria lacks any other exportable commodity which will provide the revenue we need to achieve the targets set out in the 2021 budget – which is already demolished even before the year starts.
    Try as the Central Bank might, it is going to be difficult to keep exchange rates from deteriorating in 2021. Galloping inflation will follow and a greater percentage of the national revenue will go into debt-servicing.

    President Buhari, when presenting the 2021 budget to the National Assembly, NASS, repeated his administration’s determination to lift 100 million Nigerians out of poverty in ten years. It was illusionary at best; and a cruel jest at worst. Nigerians can safely write off 2020 and 2021 as years when that Buhari miracle will occur. Indeed, by December 31, 2021, at least nine million more of our Fellow Nigerians would have dived below the poverty line – many for life.

  • Recession: No plan to review 2021 spending estimates, says Buhari’s finance minister

    Recession: No plan to review 2021 spending estimates, says Buhari’s finance minister

    The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, yesterday in Abuja, said there is no plan to review the 2021 budget currently before the National Assembly.

    She has also allayed the fears of federal civil servants that the country’s entering into recession might stall salary payments of workers.

    Briefing journalists after the weekly virtual Federal Executive Council (FEC) meeting in the State House, Ahmed said even the consequential adjustment in the 2020 budget wholly addressed salary matters.

    “On the 2021 budget, we are not planning to retrieve the budget or to reverse the budget beyond the work of appropriation that the National Assembly is currently doing in consultation with us,” she said.

    According to her, payments of workers’ salaries are guaranteed despite the recession, noting that issues bordering on any challenge on salary payments, which only had to do with agencies funded through the Government Integrated Financial Management and Information System (GIFMIS) had been remedied.

    She further explained that should any challenge on salary payments eventually arise, all that will be done is to move funds from the service-wide vote in the budget to the affected agencies so that they can pay salaries from their budgets, insisting that the issue of salary payments during the recession is a settled matter.

    “On the issue of federal workers’ salaries, there’s no issue with federal workers’ salaries. We have paid salaries for November and we shall pay salaries for December. So, there’s no issue at all with federal workers’ salaries.

    “If you hear about any issue, it is for agencies whose budget funding on the GIFMIS (Government Integrated Financial Management and Information System) system was exhausted and we are about to make an adjustment to them.

    “When we were doing the 2020 budget, we made estimates of the consequential adjustment that is required as a result of the minimum wage and we had sent the budget before a decision and approval were taken on the consequential adjustment. So, it is anticipated that some agencies might run short and we made a block provision in the service-wide vote of the budget.

    “So, when we have such a situation, what we simply do is remove the fund from the service-wide vote to the agency so that they pay from their budgets. So, there’s no problem of payment of salaries at all,” she said.

    Also asked on how the federal government hopes to bring Nigeria out of the recession, Ahmed said the Economic Sustainability Plan (ESP) had been conceived in anticipation of recession to facilitate Nigeria’s exit.

    She explained that already huge funds had already been released to fund capital projects adding that implementation of the ESP along with the 2020 budget would help Nigeria out of the recession which she said would be short-lived.

    ” You will recall that the ESP was designed to be a 12-month plan, to act as a bridge between the ERGP and its successor plan, but also it was designed specifically to help us quickly exit recession, which we had projected was going to happen.

    “So, the ESP implementation is really on course. It’s focused and also the implementation of the 2020 Budget is really on course and is very focused. We have been able to release a large volume of capital funding into ministries, departments and agencies (MDAs), enabling a lot of public works going on simultaneously all over the country.

    “So, how we will maintain this is to make sure we continue to implement the ESP as it is planned. It will help us exit the recession. It will help us reset back on the path of growth and on a road that is sustainable,” she added.

  • FG allays fears, states when Nigeria will exit recession

    FG allays fears, states when Nigeria will exit recession

    The Federal Government on Monday said Nigeria will move out of recession either in the fourth quarter of this year or in the first quarter of 2021.

    The government said the nation’s second recession in five years would be short-lived.

    Zainab Ahmed, Minister of Finance, Budget and National Planning disclosed this on Monday at the 26th Nigerian Economic Summit organised by the Nigerian Economic Summit Group in Abuja, Nigeria.

    According to her, said the recession was caused by Coronavirus which ravaged the entire world, saying that many other countries were also forced into recession because of the virus.

    She said before COVID-19, the Nigerian economy was experiencing sustained growth, which had been improving quarter by quarter until the second quarter of 2020, when the impact of the COVID-19 was felt,

    The minister stated that Nigeria is not alone in this, but noted that the nation had outperformed economies like the United Kingdom and others who went into recesson in terms of the record of a negative growth.

    She explained that while the economy has entered into recession in the third quarter, the trend of the growth suggested that this would be a short-lived recession, “and indeed by the fourth or, at worst, the first quarter of 2021, the country will exit recession.”

    The National Bureau of Statistics, NBS had two days ago said that Nigeria’s economy has slipped into another recession, the second time since 2016.

    According to NBS, the economy shrank again in the third quarter, just like it did in the second quarter.

    The nation’s economy posted a second consecutive negative growth, contracting by 3.62 per cent in the third quarter.

    The cumulative Gross Domestic Product (GDP) for the first nine months of 2020, therefore, stood at -2.48 per cent.

    It recorded a -6.10 per cent negative growth in the second quarter.

    “Nigeria’s gross domestic product (GDP) recorded a growth rate of –3.62% (year-on-year) in real terms in the third quarter of 2020.

    “Cumulatively, the economy has contracted by -2.48%. While this represents an improvement of 2.48% points over the –6.10% growth rate recorded in the preceding quarter (Q2 2020), it also indicates that two consecutive quarters of negative growth have been recorded in 2020.

    “Furthermore, growth in Q3 2020 was slower by 5.90% points when compared to the third quarter of 2019 which recorded a real growth rate of 2.28% year on year,” it said.