Economic recession is a period of general decline in economic activities and it is typically defined as a decline in Gross Domestic Product, GDP for two or more consecutive quarters. Unfortunately, Nigeria’s economy has been witnessing downturn for two consecutive quarters. The economy contracted in the first quarter, Q1 of the year, as it recorded negative GDP during the quarter. According to the National Bureau of Statistics, NBS, the nation’s GDP in Q1 2016 contracted by 0.36 per cent, the first negative growth in many years. Worse still, the economy also suffered contraction in the second quarter, Q2 and the Central Bank of Nigeria, CBN’s Purchasing Manager Index, PMI for June revealed that economic activities decline faster in June. The decline in June represented decline for six consecutive months. The CBN had reported that economic activities declined faster in June, confirming that the nation’s economy formally entered into recession in the Q2 of the year. Also, the International Monetary Fund, IMF had recently forecast that the Nigerian economy would contract 1.8 per cent while the Finance Minister, Mrs. Kemi Adeosu, later confirmed that the country is technically in recessions. The CBN also prognosticated a possible economic recession in 2016. The most crucial factor for the economic downturn is oil price. According to Managing Director/ Chief Executive Officer, Nigerian Export – Import Bank, Roberts Orya, “If the price of oil falls below $40 a barrel for a stretch of time in the coming months, we would have a very serious economic crisis”. However, the Senate on resumption from its about two months recess last Tuesday began debate on the way out of the current economic crisis. The Senate President, Dr. Abubakar Bukola Saraki kick-started the debate in his speech with short and long term solutions from majority of the senators, including power devolution, granting of autonomy to states and local government, sale of non-performing national assets, renegotiation of agreements with oil majors to free resources for development, confidence building to attract Foreign Direct Investments, FDIs, restructuring of the polity, direct engagement of the people by President Muhammadu Buhari as against the town hall meetings being held by ministers, cabinet reshuffle and Constitution amendment to empower the Federal Government to save a percentage of the nation’s revenues against raining days. Other suggestions are full diversification of the economy, encouragement of small and medium scale industries to thrive and produce for export, increase spending by government, reduction of interest rates, provision of guarantees to safeguard bank deposits by the federal government, creation of new sources of foreign exchange earnings, constitution of boards of federal agencies, blocking leakages in the system, pacification of Niger Delta Militants through CBN, ban of some food items that can be locally produced, deployment of recovered funds to finance the 2016 budget, investment in agriculture, revisiting the Treasury Single Accounts, TSA, borrowing on the short term to stabilize the economy, provision of Legal backing for the sovereign wealth fund and the recently launched ‘change begins with me’ campaign by President Buhari. The rest are training and empowerment of youths and women, supply of farm inputs like fertilizers and seeds as a way of encouraging return to the land by the people, addressing multiple taxation, review of the minimum wage and demand of higher productivity from civil servants, improvement in the security situation and care for Internally Displaced Persons, IDPs, using 10 per cent of the national budget to finance agriculture, increasing the petroleum refining capacity of the nation through establishment of modular refineries, reform of health and education sectors to discourage medical and educational tourism, strengthening the rule of law and the justice system, revisiting the cut in the amnesty budget for ex-militants, balancing of imports with local production to grow local businesses, spending on infrastructural development, stoppage in tax increases, boosting local production
should takes steps to unify the nation by making his voice heard across the country through visit to states instead of ministers organizing town hall meetings. He also stated that federal government should sell off non- performing assets as well as amend the constitution to give the federal government the legal backing to save some percentage of the nation’s revenues against the raining day. Senator Shehu Sani (APC Kaduna Central) in his contribution decried over- dependence on one source of revenue for too long saying there is need for urgent diversification of the economy. Sani said it is time to cut interest rates and also support small scale industries to produce goods for exports, adding that the “sharing formula federalism” led the nation to the dire situation confronting Nigerians today. Senator John Enoh (PDP Cross River Central) said the recession was painful as it is provides an opportunity for the country to re- strategize and move forward. “Let government increase spending. The economy has contracted but deficit spending will make sure the economy does not suffer”, Enoh said.
and proper planning to aid development also formed part of the lawmakers prescriptions. Senate Leader, Senator Ali Ndume had opened the debate by giving his colleagues a general overview of the recession malaise, pointing out that the recession affect most countries that depend largely on oil revenue for their sustenance and not peculiar to Nigeria alone. On his part, Deputy Senate President, Senator Ike Ekweremadu said that recession simply means that there is poverty in the land. As a short term measure to redress the recession, Ekweremadu called on the Federal Government to consciously release money into the economy to stem the financial decline. He said the Federal Government could inject recovered funds put at about N3trillion to finance the capital component of the 2016 budget. He also called on President Buhari to reshuffle his cabinet with a view to putting the right calibre of persons in the right places. He further said it had become imperative for the federal government to renegotiate its agreements with oil majors with a view to increasing what accrues to the government from their operations. Senator Ekweremadu said the federal government needs to build confidence by not blowing the war against corruption out of proportion thereby discouraging potential investors who wants to establish businesses in the country. “We need to prevent corruption and not wait for it to take place first before fighting it”, he said. On the long term solutions, according to him, there is need to restructure the country by devolving powers to the states and local governments and that the President