Foreign diplomats and some local economic experts have expressed fears that the current economic recession in Nigeria may last till 2021 if urgent steps are not taken by the Federal Government.
The diplomats, who appraised the economic policies of the Muhammadu Buhari administration, said the recession was triggered by the government’s three-pronged war on the Boko Haram insurgents, militants in the Niger Delta and the anti-corruption crusade.
The diplomats from some Asian countries asserted that the recession was heightened by what they described as “the lack of clear economic plans” by the Buhari administration.
One of the High Commissioners, who opted for anonymity to avoid any diplomatic row with Nigeria, maintained that any war a country fights takes a huge toll on its economy.
He said: “Some of us were alarmed when President Buhari, who was struggling to fight Boko Haram and the Niger Delta militants, chose to declare another front on corruption.
“From Vietnam to Iraq to Afghanistan to Syria: no country fights a war without its economy being the first casualty. In fact, the wars in Iraq, Afghanistan, Pakistan, and Syria have cost the United States (US) taxpayers over $4.7 trillion; any wonder the country’s economy is gasping for breath?
“In the case of Nigeria, it is bad enough that you are fighting Boko Haram terrorists and Niger Delta militants. Again, the government decided a third one which is the war against corruption”.
The envoy said that although “this is a low intensity ‘war’, but really speaking, it is a war against the economy of the nation. It’s worse than a full scale conflict apart from the absence of the cruel physical human impact.”
“The rhetoric from your President and the Economic and Financial Crimes Commission (EFCC) was enough to drive people under. Business owners and money moguls in the financial sector have locked up. There is confusion in the land; nobody knows who the EFCC will descend on next.”
Another envoy, who shared the views of the economic experts, declared that a country that gets four of its major banks’ managing directors locked up in one day and forced them to cough out billions of naira to regain their freedom has shot itself in the foot.
The experts had condemned the detention of some bank chiefs for alleged corruption offences. They said that “by that act you erode confidence in your banking sector both from depositors’ point of view and from their foreign partners and corresponding banks which usually lend them money for further lending locally.
“In our bid to fight corruption, we declared a ‘war’,” one of them said, adding that, “We took the war too far and tagged whoever has money in the country as corrupt. People became afraid to invest money in the economy. Investors became wary. They started moving their monies in droves. This put a strain on our national reserves,” one of the economists said.
One of the envoys, who did a cross-country analysis of the situation, said: “Don’t forget that Nigeria is a Third World country where the financial sector is a bit unregulated. People source funds both from the black markets and the conventional markets to carry out their businesses. What is illegitimate in developed countries like the US and the United Kingdom (UK) may not necessarily be illegitimate here. These supposedly illegitimate windows are the only ways people can use to even up with their foreign counterparts. But now everyone started suspecting the other. The middle class to which the working class depends locked up their vaults.”
The envoy also agreed with the experts that the government’s decision to implement the Treasury Single Account (TSA) at the time it was done was unwise.
He argued that it made no economic sense to mop up all Federal Government’s funds in commercial banks into a so-called TSA account at the Central Bank of Nigeria (CBN) without concluding the scientific stress test recommended by former Finance Minister, Dr. Ngozi Okonjo-Iweala, under the Goodluck Jonathan’s government.
To the experts, TSA has caused more economic stagnation than solve its intended purpose of curbing corruption.
One of the experts said: “We make grave mistakes by equating ourselves to the standards of the West. Unfortunately, even in the western world they consciously lower the standards for their senior citizens and for those who create employment for their citizens.
“Today, there is palpable fear in the land. We are in a state of tension everywhere. Nobody wants to say anything without fear of the EFCC visiting your bank to print out your account statement and invite you to make statements on flimsy allegations,” another expert stated.
He said: “As we are talking to you now, there is fear in the land. People don’t want to bring out their money to spend. As a result, government revenues have dwindled in terms of taxes and import duties. Go to the Customs. This is probably the worst period in the history of the agency. Nobody is importing anything. Everybody who has money is scrambling to hide it.”
A financial analyst, who also opted for anonymity, said that “fighting corruption is good. But corruption could be fought without making it a national priority and sloganeering it. There is nowhere in the world where there is no corruption. In fact, in some countries, the situation is worse than Nigeria. The best approach is to put systems in place that prevent corruption itself rather than creating panic in the polity.
“Sloganeering is a very bad thing for a country. Slogans like war against corruption only breed more corruption. War against indiscipline only breeds more indiscipline. In fact, there is a salient feeling in the security circle, that every law creates a loophole for exploitation by those implementing it. This is now the case as the anti-corruption agencies have exploited the so-called war against corruption and created undue advantage for themselves.”
On the way out, both the envoys and economists agreed that Nigeria is really in bad shape. One of them said that the way out is for the President to declare a general amnesty for the so-called corrupt and encourage them to start spending locally to boost economic activities and to fight corruption in a decent way without necessarily declaring a war.
The others added that, “In some countries, they try to ask those who got illicit money to reinvest it in the local economy as a way of getting amnesty. This is the way to go,” he said.
In his conclusion, one of the envoys said: “As it stands now, even with the best of intentions and the best of policies, Nigeria’s recovery is five years down the line. In other words, Nigeria can only recover if the right policies and methodical implementation are put in place in the next five years.”
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