NIGERIA AND THE LOOMING GLOBAL DEPRESSION

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The people of the world obviously do not need a Nostradamus to let them know that, the recent global socio-economic shutdown as a result of corona virus (COVID-19) pandemic may become the harbinger of an unprecedented global depression because “bad years follow great devastation”, says Chinese war strategist, Sun Tzu.


COVID-19 virus pandemic which in December, 2019, reared its ugly head in Wuhan, China, the most populous nation in the world and second largest economy had spread to the United States of America (USA), the world’s largest economy. It also made its deadly incursion into the industrial nations of Europe, Asia and poor Africa, inflicting both social and economic damages of enormous magnitude.

The World Bank stated that the virulent novel disease would cause the world an incredible estimated loss of over $4 trillion and may cause more, should the pandemic continue unabatedly, without a remedy. With the huge number of casualties and devastation, COVID-19 has been likened to what humans experienced during the World War I and II. As it cascaded through the global economy, all socio-economic activities stopped just like during WW I and China and other Nigeria’s shopping partners closed shops in spite of their reputation for both Orthodox and traditional medicines.

The Food and Agricultural Organization (FAO), warned of acute food and other essential goods shortage in the days and years ahead as a result of the economic contraction. Also economic experts have predicted conditions reminiscent of the World Wars devastations and misery. COVID-19 caught Nigeria like many other nations unaware, we should not allow the depression catch us unprepared because, to be fore-warned is to be fore-armed.

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It is expected that Nigeria’s leaders, both in government and the corporate world should ‘go to the stream early’ now, so as to come back with clean water. The situation needs rapid response, away from the way they reacted to the COVID-19 emergency.

The Great Depression of 1929-1935 followed the devastation experienced during the World War II (WW2). During the period, the countries of the world experienced the worst economic crisis and the highest rate of unemployment and poverty in the history of the world.


History has it that when the Great Depression reared its ugly head, Franklin D. Roosevelt, the then president of the United States of America (USA) did not waste time to nip the situation in the bud. He immediately searched for the best minds wherever they were, to help him to confront the situation. Through his leadership ability to recognize talents without bias, President Roosevelt was attracted to John Maynard Keynes, the renowned English economist who developed a way to analyze and explain economic depressions. The President embraced Keynes’s ideas as were articulated in his influential work, the General Theory of Employment, interest and money (1936). Influenced by the Keynesian ideas, the US Congress passed the Employment Act of 1946 and President Roosevelt unleashed his famous economic expansion program tagged “New Deal”, which eventually helped to save the US particularly and the world in general, from the depression.

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What the New Deal program of President Franklin D. Roosevelt teaches is that, a government should take an active role to promote economic growth and stability. It also teaches to be visionary, patriotic, proactive .and committed to a task. President Roosevelt was not an economist but he sought help from the right source. He knew where he was taking America to, and he got the right people to help him navigate to the destination. President Muhammadu Buhari can do the same to save Nigeria from the looming depression by assembling the right team of experts to be headed by a technocrat like, Chukwuma Soludo who is an apostle of Keynes because, as it is said, nobody can give what he or she does not have.

Prof. Soludo is well – grounded in both fiscal and monetary policies which are critical for economic expansion and stability. He has the intellectual zeal, sagacity and disposition to change the narrative if given the role as a finance minister. The post of the Finance Minister and other members of the Economic Expansion and stability board at this time should not be for second-eleven team.

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It should be for our very best minds – the first-eleven. We should eschew nepotism in this extraordinary time. It should be emphasized that we are facing an unprecedented existential crisis in the socio-economic sphere both globally and nationally. We are threatened and need to act proactively and rationally to save humanity.
It may sound alarming to many but it is being realistic; the Great Depression of the 1930s was the culmination of the devastation and the breakdown of all economic variables by the sad events of the World War II, (WW II).


This is a time to appoint people with vision and commitment to industrialization; not those with civil service orientation, but business orientation.
An Economic Expansion and Stability Commission to be headed by someone like; Prof. Charles Chukwuma Soludo, who is well entrenched in Keynesianism and well-grounded in Monetary and Fiscal policies.

The mandate in the short-term should be to alleviate the current emergency, while the long-term task should be the expansion of the economy to prosperity. The commission would co-ordinate the economic activities, working in close collaboration with the Finance Ministry, Central Bank, the Board of internal Revenue and the stakeholders but reporting to the President.

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