Stimulating the Nigerian economy

When the Federal Government announced the other day that in anticipation of approval of the 2016 budget, it was ready to inject N350 billion into the economy, a certain appreciation of the urgency needed to deal with the economy could be deduced. While the object of the fund injection, according to the Finance Minister, is to stimulate the economy by restoring significant economic activities in the country, the priorities are to ensure engagement of Nigerians that had lost their jobs and resumption of capital projects. This, on its surface, is quite commendable. According to the Minister, the money would be used to pay contractors who would show proof of the number of disengaged Nigerian workers in their businesses such employers would re-engage following such payment.

This initiative, which promises to assist in stimulating and reviving the economy, lends itself to a commendation for the government for its sensitivity to the yearnings of the citizens. However, it must be quickly pointed out that, a few weeks ago, Finance Minister Kemi Adeosun informed the nation that the government was owing road contractors alone the sum of N1 trillion. Given this staggering indebtedness, the planned injection of only N350 billion will only be puny compared to the outstanding debt problem. Besides, it seems that if a contractor is unable to show evidence of the capacity to re-absorb its already disengaged employees, the government is inferring that such a contractor will not benefit from the economic stimulation fund (ESF) of N350 billion.

The minister did not disclose the rationale for and process to be adopted to ensure that all creditor-contractors of the government are considered on a level playing field devoid of manipulation, favouritism and corruption. This necessitates the need for caution, for objectivity, fairness and transparency. Beyond the above, however, every contractor of the government who had performed in accordance with the terms of his contract deserves to be paid whatever is due to him, without the new conditionality. The new condition may be reserved for contractors to be awarded new contracts but certainly not for those who are being owed after they had concluded their projects. By the way, what will happen if a contractor shows the so-called ‘proof’’ to re-engage some laid-off staff and after getting paid, reneges?

Given the socio-economic situation the country is in now, government should avoid any policy that will call to question its integrity and erode the confidence of the people – contactors and non-contractors alike in it. Good practice dictates that if a contractor has a job that will require re-hiring disengaged or new hands, provided they are Nigerians, let that be the contractor’s decision to make. The interest of government and the people should be to ensure that there is value for money paid.

Without losing the objective of stimulating the economy with the N350 billion, it is imperative that the government must ask itself some key questions. For example, how best should the stimulation fund be deployed; on which areas should attention be focused and what are the timelines within which to expect results? Therefore, it is germane that if actually government is ready to stimulate the economy, the main area of immediate focus should be production of food for the people. As evidenced from the recent report of the National Bureau of Statistics, inflation in the food sub-sector of the economy was high compared to others. As it were, food is a basic human need. Again, food importation is reported to be high on the scale of the country’s total imports. To address the most immediate needs of the citizenry, therefore, food production should be a priority of the government. Properly injected, the N350 billion can have a measure of positive impact not only against the level of poverty and hunger but also towards the moderation of inflation, foreign exchange rate and unemployment rates as well as conservation of foreign exchange.

Now, it needs to be emphasised that the voting and injection of money into the economy are not necessarily the main challenge at hand. The real challenge is the preparations that have been made to ensure that such funds are injected into the areas of the economy that have the best opportunities in producing the greatest results. Furthermore, appropriate supportive implementation strategies, monitoring and supervisory frameworks should be emplaced to drive the process successfully. It is also exigent that focus is consistently kept on the objectives to be attained and every effort directed thereto. Stimulating and reviving the economy quickly before Nigerians become more distrustful is a major challenge. The government should specifically take ownership of and responsibility for overseeing that the huge tasks are successfully accomplished.