A former Minister of Education, Mrs. Oby Ezekwesili, has said the administrations of former President Goodluck Jonathan and that of the incumbent, Muhammadu Buhari, led the nation’s economy into recession by failing to adopt the right policies to deal with the crash in crude oil prices, which began in mid-2014.
Ezekwesili noted that while Jonathan’s administration failed to do something about the impending recession before leaving office, the current administration also failed to launch a comprehensive fiscal stabilisationprogramme on assumption of office in May 2015.
She spoke as the guest speaker at the inaugural Business Lecture of the Lagos Country Club in Lagos on Thursday night.
According to her, the economic policies of the present administration have worsened the matter, because they are not the right policies.
She said, “The parlous state of the Nigerian economy by the 29th of May, 2015 should have instructed an incisive and urgent macroeconomic stabilisation programme to realign the price levels in the economy. By May 2015, we knew we were already in trouble. As a matter of fact, we were already in trouble in 2014. That was the first time that growth collapsed to 3.8 per cent. The incoming administration should not have been told that we were weak and vulnerable.
“Had the government made quick and necessary adjustment that corresponded close enough to the level of impact of the 40 per cent decline in oil revenue, our story could have been different today. We would never have lost growth.”
Ezekwesili, a former Vice-President of the World Bank, further stated, “There is a new level that our post-2014 oil shock economy needed to find for stability. We needed a policy response that could have enabled that adjustment to happen immediately. That response could have helped the economy to absorb the shock. It could have reassured the investors. It could have reassured the consumers. It could have helped us to reasonably retain investor confidence in the economy, but that did not happen.
She stated, “The attendant fiscal pressure and the delayed right policy responses were severe enough that by 2015, economic growth had sharply declined from 3.8 to 2.7 per cent. And then began the sharper loss of growth into negative growth rate by 2016. It was a major mistake that the economy did not get timely and right type of policies that could have helped us avoid the calamitous collapse into negative growth in the last three quarters of 2016.
“The economic preferences did in fact worsened matters and set off a wave of uncertainties that dented investors’ confidence in the economy. So, it is accurate to conclude that both the preceding and successor governments conspired by their actions and inactions to throw the Nigerian economy into the deep throes of economic recession of which it must be rescued in order to avoid social implosion.”
The former minister, therefore, urged Nigerians to place a demand on the government to retrace its step and implement the right policies.
She said, “The record of the government today for timely and right actions on the economy is, however, so far not encouraging at all. For almost one year, the government delayed prime action on the fuel subsidy regime despite its aggravating import on fiscal imbalance.
“Over the same period, it delayed the right action on the exchange rate policy despite the deleterious effects that it was having on foreign reserves, the value of the naira, as well as on inflation. Before the government came on board, inflation level was nine per cent; today, inflation has doubled to more than 18 per cent. The greatest enemy of the poor is inflation. The greatest enemy of business is inflation. All you need in order to destroy the poor is total unstable price levels in an economy”
On how to restore the economy to the path of growth, Ezekwesili added, “The citizens must place a demand on the government to implement right economic policies.
“As long as we continue on the path of wrong economic prescriptions for the economy, the situation will to worsen. The more these indicators deteriorate, the harder it will be for growth to resume. The macroeconomic stability that poor choice of economic policies helped to unravel within one year took many years of work
“It is therefore critical for citizens to convict the federal government to urgently retrace its steps back to what it failed to do on May 29, 2015. We swore to allow the market economy to adjust itself without command and control. The government failed to launch a deep fiscal consolidation programme. Recession is nothing new in the countries.”