Nigeria Recession to last 5 Years – Diplomats

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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