Nigerian recession: Massive food production to the rescue?

Nigerian recession: Massive food production to the rescue?

Dayo Emmanuel

 

 

As the US Dollar continues to gain against the Nigerian currency, the Naira, the effects on local goods and services are becoming unbearable for the common man.

The exchange rates now standing between N485 and N500 for a Dollar in the last few days has been responsible for high cost of commodities in the local markets.

Mrs. Ashaolu is a foodstuff seller in Agege area of the Lagos metropolis. According to her, a bag of rice now costs between N16,000 and N17,000. “Last week I still sold a bag of rice for N16,000 but today I can’t dare it. It keeps going up. Remember this time last year, we were selling for about N10,000, it is becoming unbearable really, the government should do something fast,” she advised.

Going by Ashaolu’s submission, it means there has been a 58% increment in the cost of a bag of rice within 12 months.

Recently, the Vice President Professor Yemi Osinbajo told Nigerians that the Niger Delta militants are responsible for the recession Nigeria is currently going through.

The militants in different factions have continued to blow oil installations and depleting Nigeria’s daily oil production.

With an economy largely relying on oil, destruction of oil facilities must also largely impact negatively on the economy since the economy is yet to be diversified.

According to Osinbajo, the country now produces below 1.1 million BPD as against the 2million the budget was hinged on, due to activities of militants operating in the Niger Delta region.

“Perhaps, it is important for us to understand the nature of this recession in which we have found ourselves. In discussing this issue of recession, there is tendency for people to generalise. A lot depends on what sort of recession and how we got here.
“If we did not have vandalism in the Niger Delta as we are currently suffering, we would not have this recession today. Moreover, in looking at the solutions, we should try to focus on the type of problem we have and what instigated it, then we can begin to come up with better solutions,” Osinbajo said.

Meanwhile, Finance Minister Kemi Adeosun has said Nigeria is coming out of recession; a statement that has not gone too well with the average man in the street.

Confident Adeosun made the disclosure while responding to journalists recently after a two-day National Council of Finance and Economic Development conference held at the Green Legacy Resort, Olusegun Obasanjo Presidential Library, Abeokuta, the Ogun State capital. The conference with the theme: ‘Enhancing revenue generation and obtaining best value for money in expenditure,’ provided avenue for the Minister to enlighten Nigerians on state of the economy.

According to her, the country is already getting out of the economic recession, given the pragmatic approaches the Federal Government is taking to reverse the trend.

“We are already getting out of recession because of the actions the Federal Government is taking.

“We are investing more in capital than we have ever invested. We are sorting out infrastructure, we are stopping wastage and so the signs of recovery are already there.”

However, the recession in Nigeria is taking toll on neghbouring countries she shares borders with. Especially next-door Republic of Benin where a lot of businesses are transacted on a daily basis.

Pastor Raphael Adepoju is a Nigerian missionary serving with the Christ For Rural Area Ministry (CRAM), Nikki, Northern Benin Republic. According to Adepoju, “Before now, we used to exchange CEFA, the currency we use here with the Naira at a very profitable rate. There was a time we exchanged N1,000 for between 3,000 and 4,000 CEFA but the CEFA is closing up with the Naira which is driving Nigerian business people away from patronising their counterparts from Benin Republic.”

Whether Nigeria would get out of recession soon or not is a matter of time but the method for soft landing is perhaps more important.

Recently, the National Assembly at its resumption after a recess debated on selling some national assets to inject proceeds in the economy. Injecting more money into the economy would no doubt help out of recession. But what happens to future national investments?

“If we sell our assets now to recover from this recession, what would we sell in the future if we ever slip into another recession?” Senator Andy Uba asked his colleagues. Uba, representing Ananmbra State in the Senate added that, “We must seek an alternative way of recovering from this recession but sale of our assets is not the way out.”

Frankly speaking, selling national assets may not be the most sincere method of escaping recession but to look inward for fastest method of diversifying the economy from oil.

To a pensioner, Mrs. Abiodun Osunmuyiwa, massive food production is a way to cushion effects of the recession.

Osunmuyiwa who recently retired from the Federal Medical Centre, Abeokuta said, “Food on the table is what actually concerns the common man. The recession is biting harder outside Lagos where economy is largely resting on salary earners. So if the government can invest in massive food production, it would largely lift the burden from people.”

She added that, “If there is massive food production, it will lead to industrialisation and once there is power supply, if the dollars should keep gaining against the Naira, as long as there is food, we don’t need the dollar, Nigerians can improvise and survive, that’s the truth.”

Dr. Gabriel Omonaiye is the Medical Director of God’s Goal Hospital and Maternity, Ojo, Lagos. He however agrees on diversification.

“On recession, diversification of the economy is compulsory. Also we need to reduce our level of consumption of foreign goods in order to conserve our foreign reserve goods in order to conserve our foreign reserve. The members of the National Assembly should take a pay cut. Seriously and sincerely tackling corruption without fear of favour,” he advised.

The University of Ilorin-trained physician also advised that, “Maybe one of the arms of the National Assembly should be abolished, to release part of the gargantuan money that goes to them for doing so little.”

“The cost of governance should be drastically reduced, as exemplified by the currently trending speech by the former governor of Anambra State, Mr. Peter Obi.”

Omonaiye also mentioned that the exchange rate has affected medical consumables.

“The high exchange rate has drastically increased the costs of medical consumables on one hand and has pauperised a large chunk of Nigerians. This is taking medical care out of the reach of so many individuals,” he stated, continuing that, “The economic hardship indirectly impacts negatively on the health through malnutrition, causing easy susceptibility to sickness and poor recovery from sickness, as well as poor treatment outcomes (recovery).”

Meanwhile, a renowned economist and Managing Director of Financial Derivatives Company Limited, Mr. Bismarck Rewane has suggested for the economy to bounce back, the Federal Government must borrow and sell assets to raise funds that would be injected into the economy.

Rewane who was monitored while speaking to Channels Television in Lagos recently said, “The government must inject funds into the system and the executive is fully engaged because they know they cannot hide, they have to deal with the problem and given the fall in oil revenue, you have to increase the deficit plan for the recovery.”

The analyst stated further that, “You must borrow and President Muhammadu Buhari has said the country will borrow at least $5 billion externally. We must sell some assets because when you are in this kind of situation, you have to sell some assets.”

However, whatever method the government uses in solving the economic issues is nothing to the common man who is fixated on having food on the table and being able to meet daily needs.

Therefore the government must be tactical and transparent enough in carrying the populace along through the hard times.

Again the government must provide daily information and invest in infrastructure and national orientation in order to update the populace who must continually believe in the system.

 

Story by Dayo Emmanuel