Recession, simply put is a period of reduced economic Activities: a period of uncontrollable high cost of basic food; basic services; mass loss of job; excessive demand and highly decrease in supply of basic goods and services, especially, food and agro products and it is usually as a result of war, famine, drought and a natural disaster.
Every recession which has ever occurred in human history has a traceable causation, but that of Nigeria is strange and avoidable.
Nigeria recession did not appear, nor set into the economic life of without having its footing gripped on human failures and incompetence’s.
An economic growth activity like automobile for example depends on the capacity and intellectual ability of the navigators of the economy’s ability to make informed decisions, timely policy switch; Swift economic political driven actions targeted at localization of the basic economic policies without also neglecting the Diasporas and international cooperation, competitions, competitors and global economic politics.
Recession is the only acid test to identifying and exposing the quality and the level of intelligence of the drivers of every economy, especially ours. Some have claimed that current recession in Nigeria were occasioned by corruption and looting by the past administration: well, such claim has no quantitative and qualitative proof. For example; for the fact that fifty billion could be stolen unnoticed from a certain economy without immediate negative impact on the entire system is clear evidence that there is a combination of excess consumable liquidity, and also unprecedented availability of resources; and also great and sophisticated “shock absorber” mechanism installed by the managers of that economy.
Consequently; economic recession can be likened to epidemics: when health system or ministry is proactive and is being managed by the best hands, you can be rest assured that they can navigate the health ministry through any form of challenges, but when the person operating or supervising a kidney Transplant is a PHD holder in economics, you can imagine what the outcome of the surgery would be.
The current recession was occasioned by bad managers of the economy and not by corruption, because there is corruption everywhere there is human, it’s a systematic and humanistic thing. But suffice is to say that corruption is not a Robbery; it’s not a situation where you steal the source of the resource itself but just part of the resources.
This Recession is artificial, its man-made, it’s a byproduct of bad economic policies; ill-timed policy switch, policy summersaults and constant politics driven economic policies that is void of well thought out developmental programs, with sharpened applicable tooth and agility.
In the most recent time, the Nigeria minister of finance blamed the western world for the inability for the government to achieve stable power generation: that her statement is a great insight into the economic developmental mentality of the government and the quality of managers they parade.
We have in our hands a generation of leaders who believed that education deprives you from thinking. We have managers who thought that all they were taught in the school by the western theorist are workable in Nigeria by default, not knowing that we have a varied cultural economic demands and supplies.
This essay will help us to see the origin, history and the causation of the present recession. And we shall waste no time to narrow it down to the door step of the managers of our economy, right from the onset.
The leaders of this nation must grow its own economic teeth; they must stop implementing the economic imagination of every Okeke and Musa that brand himself a western economic theorist if they want this country to begin to evolve a stable economy.
THE ORIGIN AND THE CAUSES OF THE PRESENT RECESSION
The pre-origin and the pre-causation of Recession in Nigeria
Nigeria is a nation of “off the record” economy. We have to accept the fact that we run an “off the record” based economy; the implication of the above statement is that the federal government are not sure and cannot be certain about:
- The number of barrels of oil produced per day
- The Tax system is not open; you cannot say for certain the companies whose tax certificates are genuine.
- The manufacturing industries and Agricultural sectors are not yet organized or numbered by the government
- The entrepreneurship in this country is all about politics
- The Nigerian population figure is a farce.
- The academic sector is retrogressive and mere recording and re-recording of other nation theories and solution for their problems and a student is consequently not allowed to think.
I could go on and on, but the fact remains that the above mentioned fragmented and cardinal part of the economy are being operated by citizens whose day to day activities mostly takes its operational directive from the foreign economy. Dollar and pounds based decision and directives.
In most cases, the production and business activities in question may not necessarily required foreign exchange but, because every operator of business want to have an economic base and platform for its business decision, therefore they unconsciously made foreign currency its economic decision base because they do not trust the ability and capacity of the managers of their own economy: no one trust our government economic managers because they recycle what is already known by the West; so, we all go West.
The manufacturers do not trust the government who are prone to patronizes foreign products and yet preach the common man to patronize made in Nigeria product. For that and other reasons we have majority of the citizens of this country operating foreign based economy.
For you to understand what I meant by foreign based economy, or indirect economy; why is it that the only people that this recession effected so badly are the salary earners, contractors, manufacturers whose raw materials are sourced abroad? Every Trader and most non government dependent and tied business men and women are expanding. Most of those not affected are operating large bank accounts in the neighboring African countries, using Nigeria as branch office and does not even necessarily have to pay taxes there.
You can now see that, ab initio the government is not in control of the economy; if you have a government that operates an opposite business program and polices from that which its citizens operates that economy will always be at the Marcy of any foreign economic vibration.
About the eighty percent of the South Easterners are traders, and does not take their economic decisions based on the Nigerian economic direction because of experience of civil war, inconsistency and policy summersault; they have over time evolved a system of entrepreneurship which you can describe as the most practical and workable entrepreneurship system that is able to turn academic illiterates to great entrepreneurship gurus: for example, INNOSSON, Ezeemo, NEROS pharmaceutical, Ogbuawa, Ibeto group and Chicason to mention but few were all among the product of the same Igbo traditional entrepreneurship system-Tradepreneurship, Christened (Igba boy).
Like I said above, that system of entrepreneurship operates an indirect economy: inside trade form of trading activities, and they constitute the major users of foreign exchange (FOREX) and changes FOREX does not easily affect them negatively, because they know exactly how to switch cost. It is not gain saying that all of them are master in currency prediction and conversion.
Therefore, because the Nigeria government have not really decided to build its own economy began they to evolve a system which is out of a government control; a system that does not take orders directly from our Government economic policies: we have a system that even the government itself cannot control, and it’s unfortunate that the drivers of our economy are even more foreign driven in their thinking and ideas conceptualization to a point that they are nailed to a certain economic corner at which they can never decipher our critical situation or what is wrong with the economy: because, they want to resolve our economic woes or recession solely by the application of what they learned from “Harvard” business school.
The origin and the causes of our recession can be traced to the ignorance of the operators of the system, or the operators of our economy of the dynamism of the economy of which they operate here in Nigeria. How can someone who have never writing any paper or thesis on the Nigeria economy or on our traditional Entrepreneurship system be assigned to manage our economy, merely because he or she have learned so much about the rudiment of foreign economic policies without recognizing the fact that the eco-specifics of our business culture are different and varies from that of the western world.
To further buttress my point: the South Easterners because they have operated this very (Tradepreneurship) Entrepreneurship system over time succeeded in trade and commerce. How many of our economic experts have taken time to research and write on that serious part of the economy, or must it be foreign based before it worth writing about? The failure of our economic team to fully understand and be acquainted with the system which they are called to manage is the remote cause and primary reason for the recession and it will not stop at just recession; it will get worse.
How come that the operators of our economy knows nothing about the system of economy that have being operated in Nigeria for ages by the South Easterners, which have made many billionaires but know all that theirs is about India, Asia etc. entrepreneurial system, and are recommending for the adoption of a system that may not have worked in actual sense in the country of its origin?
Trade fair international market Lagos alone is worth over forty billion Naira of the traders funds and, host over one million business families: each bank in Nigeria have at least two branches inside the market, yet those who are in charge of our economy have not known that their ignorance of system which the traders operates, coined Tradepreneurship by me is the cause of Nigeria recession: had it been they understood the system they are piloting, they would have worked out modalities to evolve and operate a unique economy which would be independent of foreign economy.
some years ago when the Russian and American government bilateral relationship sores, Obama demanded the American companies like, VISA card and some other companies to withhold and withdraw its services to Russia, but alas, the Russian economy didn’t feel the chock because their government and theirs system does not depend solely on the American system.
When you award sensitive business and security contracts to your UK friends, or your former employer in the Diaspora, you are laying foundation for recession and economic flight and that is why each time they threatens to close shop we catches cold.
Had it been that the Russians do not have tested and trusted providers of same third party financial services, you know what would have happened to their economy.
Forget certificates: we have some ignoramuses who are very good Linguisticians among the operators of our economy. We have those who are ignorant of the peculiarity of our economy making economic decisions for us.
Recently our economic activities reduced drastically the moment foreign investors began to withdraw from the country and relocating to the neighboring countries and it sends a negative signal to the economy which automatically resulted in loss of job, loss of goodwill.
Every economic policy should be a product of well thought and well informed articulation. Please, don’t get this assertion wrong: a policy may be academically sound but dangerous if it is not as result of a well informed local content driven decision.
A stranger to the peculiarity, specifism and individualistic nature and dynamism of the African and the Nigeria economic culture can never make a well informed economic decision here. Misinformation is worse than lack of information. Our economy has been on the survival race or a life support since our independent, because we don’t have local content driven economic base.
Before independent our economy were better off, even when we have no banks as we have now, but for the fact that most percent does not have bank account doesn’t stop their individual economic activities. When banks were introduced things changed because banks was introduced by those who are experts at the operation of western economy and banking institution who are as well ignorant of our cultural driven economy-could not provide a version of Nigeria based banking services.
Take the constitution of a company for instance: it is the western culture to co-own a company, but an African can own more than one company single-handedly. Don’t forget that the inception of the idea of co-operation, apart from allowing more participation in company ownership were as a result of much energy and stress of running of accompany or business and therefore the segregation of responsibilities. But a black man by his nature could function in a multi-purpose and dual responsibilities and still retain his agility. So after colonization and the independence, government horridly forced down on us quantum of policies and economic laws which are unworkable, unfamiliar, un-implementable and retrospectively repugnant to our economic culture.
for the fact that a policy were well researched in the Harvard does not mean that it is implementable in our economic culture; and that is why I have always advocated all along that we have had ignoramus running our economy. Take for instance our Igbo Tradepreneurship system that has been furnishing before the independence and colonization: it is never and can never be affected by any negative impact of recession. Tradepreneurship, yes!: that is so because the operators of the system do not have the knowledge of the western economy like the managers of the country economy. They are traders who have mastered the art of growth and development of that individual based economy.
In this recession, the government is crying but the traders are happy and smiling to the bank; why, because the government is operating a foreign, strange and un-understandable economic theory while the traders are operating a system of economy they have already mastered. Strange!
The government failure boosts and expands the fortune of the traders who operate a consistent, familiar and indigenous knowledge based economy.
Go to every kiosk, shops and retail stores; they are not shaken by recession but every salary based person is complaining. And the government cannot solve this problem of recession using copy and paste policy lifted from the “UK or US” economist shelf.
How do we expect a foreign and western driven economic research and policies to generate an African based solution?
Nigeria recession is not a news because the entire Africa has been in economic recession ever since colonization because we refuse to think; we refuse those who could think to test run their ideas because it did not synchronize with what was found in the western books and thesis and that is why government of Africa will always bring recession upon itself. If not that the non-governmental and indigenous business operators have unconsciously and consciously refuse to allow government trial and error brand of managers to mislead them-by now, we all would have gone imploded economically.
Other countries that have experienced real recession were because of reduced economic activities in their country- maybe there was drought, natural deserter, war, epidemic: there must have been, and must be a sudden unusual event, and when that happens, they quickly devise measures –Locally based economic measures to restore the situation in other to restart the interrupted economic activities. They do sometime give long term soft loan, tax waivers to the business and employers of labors who are badly affected by those sudden uncontrollable events that brought about the recession. Now, what do we really have here in Nigeria; the government and its partners are in recession, we don’t really have a real recession.
Our government, their partner Banks, Airline, contractors and every other business activities that rely on government are in recession; but every other activity in the economy outside Government control is not; take a look at the states that has high concentration of Tradepreneurs, they don’t panic.
HISTORY OF HORRIDLY IMPLEMENTED ALIEN ECONOMIC POLICIES
Unless it is in the secret chambers of the government, I haven’t seen or read any definite home grown, people oriented, growth targeted economic policies in Nigeria and other African Nation that is not westernized or mixed with difficult and hard to interpret western based concepts and prognosis: you can agree with me that most time, not even the authors, the speakers and the implementers of those policies can interpret it themselves.
When a policy is difficult to explain even by its Authors it should not be horridly implemented, even if the writer is a world class economist, because an ambiguous theory will produce catastrophic and ambiguous result.
I will always use, Tradepreneurs, manufacturer’s factures and farmers as my case study, because they are the highest employer of our labor force in this country: if we have home grown economist who are lettered in the West, but also well-grounded in the working and dynamics of our cultural economy and Tradepreneurship system, they would never introduce any policy without consulting the aforementioned group.
How can a government which never had Agricultural policy wake up one morning and designate certain imported food contraband, and most abroad trained economist foolishly agree that the policy were good because they were all programmed to think that way: no consultation with the traders and the manufacturers who are already bagging the imported rice and other food produce at home; it will only take a miracle for those companies to survive, seeing that they already have existing investment of which they may have just expanded. what about those that would be unemployed; but if the government had met with them and agreed on the lifeline of which such policies would take off, or swap the already existing machineries in those companies with Agricultural producing machineries, then, such policies could be accomplished within one year, because of retraining and recruitment of staff for the expected policy implementation. But we all know that government of this nation doesn’t care about such ideas.
How do you expect people who have already invested in a certain venture to in a short period change to a new policy when they have already invested heavily elsewhere? This also shows that our policy formulators are not in touch with the real people that would drive the economy forward.
The Recession we have in Nigeria were possible because the government does not even know its own cultural economy: yes, because those saddled with the responsibility to coordinate our economy does not believe in our system, they do not believe in our people and do not want to relate with our locals.
They would rather spend billions organizing shows and PR in other to attract foreign investors, and were ready to change our existing policies to suite them but wouldn’t mind to destroy all that was built locally with one abracadabra policy of which even the promoter can’t even explain.
Our policies caused recession and that is why the foreign investors of which incessant inconsistency and policy shifting were meant to favor, against the indigenous investors flee with their investment in the face of a mare bad PR.
You don’t rely and depend on foreign investors to build your economy and so is it with those who rely on foreign mercenaries for their internal and external security.
Why won’t there be recession when our economic policies are not in concordance with the activities at the real sectors of the economy.
For the fact that you sit in your air-conditioned office and signed lengthy and voluminous well edited and highly tailored economic bill and policy does not mean that it has the capacity to add one single digit to our GDP.
Our economic policies initiators are foreigners to our economic plight and consequently formulate strange economic solutions.
How much did the government who banned imported foods budget for the Agricultural sector? And how much did they eventually release into that sector overtime? How many local companies who also have interest in food production do we engage in Federal and State contracts?
We award contracts that worth billions to foreign companies that invest chunk of its earning to agriculture in its home nation and do nothing but harm to its host nation. Do we really have a policy that forbids and bans the government from awarding construction and services contracts to companies who over 60% earning are wired back to its home country through expatriate salary, services, spare parts, equipment, Technology and Training costs, etc. Do we really have a policy that does not frustrate Tradepreneurs and is not hostile to the locals?
Recession comes to take, and its ready to take all: this recession is because a visitors whom we have for ever time hindered the indigenous investors and manufacturers and entrepreneurs to favor have packed their bags and baggage’s and took flight. they have left in their thousands, but if our foreign minded economic formulations who are driven by foreign economic theorists had for all along theorized ways to improve our own people, we would not have been where we are today, and it’s unfortunate that they won’t even yet realize what causes recession because I believed that some operators and managers of our economy are already outside our shores seeking for solution to the recession caused by the same outside shores economic policies driven ideology.
THE DANGER OF IMPORTED ECONOMIC POLICY
Economic policy is to the business and the entire economy what petro is to generator. You may have a brand new and high voltage generating set but it remains useless without petrol.
Before now, our economies were agricultural based; not because we had any agric policy formulated by the government, but because our ecospecific and environment have great agricultural potentials: the foreign traders consider our shores a very high destination with item of trades, and there enters a mechanized farming. Instead of our government to patronize our home grown and much potent agricultural products, the same government concentrated on the importation of those foreign agricultural produces: they award contracts to the competitor with our farmers; consequently, our people began to face out already existing local system for the imported goods and services. Therefore, it is a clear fact that the present situation were occasioned by ignorance on the side of the government who dole out policies that benefits today to destroy the future.
Haven seen the unwritten but existing economic policies being implemented by the government, simultaneously, the citizens began to move into that direction of importation.
Let me take you through some analysis that may not make academic sense, yes! I don’t even want to make academic sense because we are where we are today because of those who want to make academic sense at the expense of the reality on the ground: during political campaigns, to whom do the political parties award contracts with the money generated here in the country? Foreign companies of course. Where do they host most strategic meetings? Of course in London, Dubai, Paris and U.S.A: the rice and goods they distribute are equally imported. Now do you still wonder what causes the current recession?
Most major projects of the government are executed by foreign companies and yet they expect the locals to grow and compete with their foreign counterpart.
We had Nkalagu Cement, Niger Cement and few others but the government watched them go into extinction: does that mean that the governments were not constructing, building and contracting, of course they were awarding and constructing but these contracts instead of growing the economy were gradually ruining the economy. Do you think they would have collapsed had all the bridges constructed in the country used locally made cement?
We had cement industries yet allowed the construction company to import cement; we have plastic industries but refuse to involve them by awarding some uncomplicated production contracts to them but award it to our friends and class mates at “Harvard and Oxford”: In fact, we may not have had any economic Policy after all.
But it is unfortunate that most of our economist have not recognized these indices as the greatest economic undoing in our economy. So long the chunk of the government expenditure goes to foreign company we will never get out of recession.
We have always formulated frivolous cosmetic and paddy, paddy (acquaintance) economic policies which have no link with the real drivers and the lubricators of the economy.
But how did we get here: You have to understand that recession wouldn’t have showed up now if we had allowed our economy to go on as usual, if we hadn’t tried to change the goal post in the middle of the game. We suddenly want to circumcise an Adult. We want to perform surgery on someone who were not giving any pain relief, of course the person must shout, and that is what our economy is doing now: the economy is reacting as expected, but not that the pain will be over soon.
Don’t misunderstand me; we do not have the real surgeons in the operating room. We may have men and women adorn with surgery and surgical tools but they cannot use them because they do not know what to do with these tools, otherwise they would have proffered solution and predict a possible date of recovery and what to do to get out of it but couldn’t, and will not: because we have bad policies and bad policies formulation process by bad policy formulators though appeared to be very academically sound.
BUDGET OF THE GOVERNMENT SHOULD BE A GUIDE TO INVESTMENT AND NOT ONLY FOR EXPENDITURE
Recession is a periodic thing and required a periodic economic mechanism to come out of, therefore is this recession, we need periodic budget remedy.
If our budget cannot resolve recession, then our woes knows no bound.
Our budget is supposed to be a guide to every economic decision, plan and implementation.
Nigeria government have always lack the will power to strictly adhere to its budgetary goals and plans. Again, those whose responsibilities are to execute those projects should also be tutored on home grown and indigenous economic evolution and development and not these are inexperienced at domestic economic indices but gurus of a Western classroom economics.
Budget were supposed to be a guide to our economic road map, but in a situation whereby it becomes a mere ritual and does not have the ingredients for economic control, lubrication and stability: appraisal of our budget and their implementation have not really shown that we are ready to develop our economy, our budget have always been more political than economical.
For instance, for the past years, what economic achievement can we say and be proud to have being a direct product of our strict budget implementation?
If our budgets have at least attained a steady 40 percent implementation for the past twenty years, on Agriculture, Transportation, Manufacturing, we won’t be talking about recession. The departure of foreign investors wouldn’t have collapsed the FOREX and government businesses, but because we have for a long time operated Westernized and guess work economics the entire driver of economic development was hit by recession.
Agricultural sector and manufacturing sector budgets are supposed to be consistent, the implementation process are supposed to be followed up and juxtaposed against the level of the people’s participation and involvement.
If the agricultural tools are manufactured even at a very high cost in the country and those tools made available to the key players in the agricultural sectors the cost of production of the Agricultural goods by now for the both sectors would have stabilized on their own, but our budget have always benefitted the foreign based investors more than the locals, and the economy have over time suffered for it.
One would ask, does it mean that the entire budget passed in the various States and Federal house of Assemblies over the years were not really budgets after all? But I would like to put it thus: if they were actually a working documents, what have it achieved for the past years. Which sector of the economy is actually alive and viable?
I think we need an overhaul of the entire economic system, and we should first; recruit economist that are well grounded with the Nigeria culture driven version of economic ideas.
If we could from this moment ensure that the budgeted allocation to Agriculture and Manufacturing gets to the real locals and the actors in those industries, ensuring that 80% of the work forces are locals and every fabrication are done locally. With these rules it won’t take up to ten years to cause an economic revolution, but so long the government continues to import every known and unknown service and patronize their foreign partner’s companies, recession will become seasonal.
THE 2015/2019 ELECTION AND THE CURRENT ECONOMIC RECESSION
Because the whole world economy are now under the influence of both local and the international politics the last national election played a major impact in exposing our bobbles laden economy.
Majority of the foreign investors thought that the past leadership will not concede defeat, if it losses, and as well believed that the war drum by the opposition party would be a reality and therefore systematically pulled out most of their resources and relocate them in the neighboring countries.
I want us to understand one thing, investment decision is always a long term decision, and formulated venture are not easily changed half way of its implementation: consequently, after election and seeing that no war broke out they could not easily retract their decision.
After the election, when the polity were yet so intense, the pressure were so high on the people: The business community, the foreign investors and the entire world were waiting for the team which the government would assembly; especially to know it’s economic team, so, the combined delay in the selection of the economic team by the Presidents in 2015 and budget passage delay drove away many investors whose money and resources cannot be kept dormant and unused for a long period of inactivity of our economy ,because no business survives a long period of inactivity. The loss of capital by Julius Berger, IBETO Cement and host of others can attest to that: because there were no serious activities, and no enthusiasm on the part of the government who do not appear to be inspiring, therefore the investors have to put their money elsewhere.
Could you imagine that in 2015, it took this present government a whole six months to get his team of executive together, and over four months to get budget passed; therefore because the government wasn’t inspiring and could not inspire investment into the economy investors fled in droves.
Again, as the government spent much of its media time to debase the image of the country helped to scare the investors the more. I want to make it clear here that those investors are not religious people. They are out to do business and are ready to compromise, and even take advantage of legal loopholes to maximize profit in other to make their shareholders happy and also to pay back loans, but when the government negates the workings of the law and begins to speak from the religious point of view, fight corruption from the religious bases and not from the legal points of view, the investors who pay experts to x-ray every available tax, legal and business laws to enable them take advantage of legal ways of escape in other to maximize profit will not like to do their business here when the letters of the Law are not sacrosanct and respected by the government: after all, it’s not wrong to master the existing laws and to use it to your own advantage.
Again, the derogation of Nigeria by our president who publicly announced to the world that we are “all” corrupt was a very heavy below the belt punch on our economy; an economic demeaning punch for that matter. We all know that both the foreign investors and locals are not saints but it does not make any economic benefit to declare your company bankrupt when seeking out for loans, and that is exactly what the President did to our economy and the nation as a whole by that statement.
We are living in the political economy driven society globally and unless we get our image right in the global community we may never get out of this recession. Remember that I have already said that our government did not consider the indigenous investors and business worthy to be incorporated in its economic policy formulation as every government economic policies were made to favor the foreign investors: consequent upon that fact, the result, the impact and political tension orchestrated by the 2015/2019 election drove out most of the foreign investors, and therefore exposing our lack of home grown economic activities.
The aftermath of the 2015/2019 general elections have successfully shown that our economy is a farce, fraud, lie and a fabrication: yet our economic advisers/leaders and ministers are yet pretending about it as the people keep wallowing in ignorance induced delusion.
For the fact that one U.S dollar could be exchanged from
N190 to N500 naira within one year just because the foreign investors left in panic have revealed how unreliable our economy are: it also shows that, we are not in charge of our economy. It has shown that the Nigeria economy is more or less a division of foreign based economic activity. We do not actually have any influence whatsoever on our own economy.
The government should understand that they are the one who drove us into this mess; they must as a matter of urgency recant most, if not all the negative utterances made against the country and consequently affirm, declare that those statements were politically motivated and not a statement of fact.
THE CURRENT ECONOMIC RECESSION AND THE INSECURITY IN THE COUNTRY
Another thing that was claimed to have created chock in the economy is the issue of insecurity. The security situation of the country as a whole they claimed: “the Niger Delta, Militants; the Bokoharam; the MASSOB and other Sundry agitations are also among the causation of our economic woes,” but suffice is to say that there is no country without security issues. Therefore I will not agree totally that the current security situation is the reason for recession. The western world built their economy on war; it was actually during incessant wars that British, Russia, America, Germany and host of other nations elevated their economy. War pays; therefore our problem is never insecurity. During the Biafra/Nigeria war, the foreign exchange were never what it is now, Nigeria never experience recession and that alone proves that war and insecurity does not cause recession. It is a sheer ignorance that the current managers of our economy have identified the current insecurity as a major cause of recession.
If war causes recession most of the western countries would have gone into extinction, and also Nigeria would not have survived the 1967 – 1970 civil war: on that note, I want to re-affirm that it’s the bad management that causes recession and not insecurity.
HOW THE GOVERNMENT CAN OVERCOME THIS RECESSION
Recovering from every recession is never a big deal when it is a real recession; what we have on our hands is not just recession but bad management induced recession.
We are not supposed to have recession because we never had a natural disaster which have the capacity to cause a pause, cessation and suspension of business activities but because we run a system that are being operated by those who should not be there in the first place. Believe this or not; what I will recommend may not synchronize with what we were taught in all professional and academic class but that recommendation is only what we have never done:
For us to get out of recession, Nigerian government must replace those who jets out to consult foreign economic solution with the home grown economists.
We have for many years forced our system, our policy and laws – economic laws to reflect what we were taught by the Western economist which never worked here because the experiment that produced these recommendation were never carried out on our soil, not in our nation, and yet some people expect if to work. How do you recommend a treatment based on a diagnosis carried out on mister A to be administered on Mr. B and expect to get same curative result?
We must restructure, we must clean up the system and do way with foreign certificated experts who are only good in recommending foreign solution for a local problem, if we can’t do this first recommendation, and very quick; our country economy will remain a slave to other economies.
I know that the possessors of foreign certification will hate to hear this but they must be told that we have over-experimented and over operated our economy based on foreign methodologies and we are never better off.
Again, the government should enact policies that would concentrate on home grown economy and will be the one to take the first step by awarding most % of its contracts to companies that have higher concentration of its manufacturing plants, Agricultural business and prominent agro farm business in the country with a defined benchmark annual turnover in those trade so as to avoid ghost companies bidding for contract.
No company should be allowed to bid for contracts in the first place when they do not invest a certain percentage of their returns back into the local economy, because any company that has a real investment in the country that is lucrative cannot leave easily, even during war.
Also, the government should study and find out the workings of our traditional entrepreneurship system, Tradepreneurship which have produced great businessman and industrialist and encourage that system vigorously, it may even begin to certify the products of such traditional entrepreneurship system or even make it a course of study in our higher institutions; and maybe some nations will start coming here to learn it too: Tradepreneurship.
I also want to appeal to the government to stop chasing after the foreign investors and concentrate on our local investors. When we make laws that are favorable to our locals the foreigners will be left with no choice than to troop in; I don’t know how they expect that the foreign investor would want to treat our country people; when they understand how bad we treat our own country business men, and mind you that they will always run away in any in time of little crisis.
When we have done the recommendation above, we then involve our people in the nation’s economic building: but I want us to remember that we have to first of all allow the home grown economist to chart the new cause for our economy; they will among many things recommend for the removal of every policy which is unfavorable to the local investors, and where competition is necessary the tide should be lowered for the benefit of the indigenous companies, the most complex and complicated projects or contracts should be awarded jointly between a foreign company with an indigenous company for a possible knowledge transfer.
HOW INDIVIDUALS AND COMPANY CAN OVERCOME THE RECESSION
I want to recommend that the effect of recession can be reduced by every individual by temporally suspending consumption of luxurious goods and services.
Identify thing that are basic and necessary and spend only on them. Individual should temporally stop investing on shares of any company that trade on luxurious goods and services and invest on those that trade on basic goods and services Because people are prone to consume much during hard time than every other time.
SOME WAYS ORGANISATIONS CAN SURVIVE RECESSION
I will make a general recommendation about what the business world in the country could do to survive recession.
Generally speaking: It’s time for business organizations to invest in the institutions that promotes good governance as a way to cut long term cost of doing business in Nigeria created by ignorance and bad leadership.
Ensure that every venture that is not cost efficient should be thoroughly reconsidered; but I also insist that this is not the right time to venture into long term business and investment, not minding the anticipated profit margin: because, we have not evolved institutional stability and integrity; Nigeria still runs its policies on personalities, and no plans by the political class to build strong institution as things stands now.
Consequent upon the aforementioned possibilities, it’s highly risky to have a long term investment in a political environment where strong personalities take the place of strong institutions: it’s usual that whenever there is change in leadership the negative impact will be irreparable especially when the new leadership is of a different political ideology.
Companies may even invest in less lucrative ventures with a small or medium life span in other not to be inactive and yet able to service debts, salaries and also to enable it contain the result of its projected yearly depreciation, depletion and Amortization of all fixed activities.
The management of every company should not press the panic button or threaten their staffs with retrenchment, sack and downsizing; rather, they should increase the number of meeting with the junior staffers; and require of them to recommend what they would like to be done from their various departments, or even outside their brief in other to keep the company afloat. This is also the best time to try new product life if it could be jointly produced with existing products and services without altering of the existing process and fixed elements.
Obianyido Obinna Emmanuel is an International Published Author; Professional Accountant; ANAN Awardee, and the star Prize winner of National Accountants Undergraduate Essay Competition (NAUEC), 2011/2012.
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