YES! THERE IS NO ECONOMIC RECESSION IN NIGERIA.
As a chartered administrator with the Chartered institute of Administration (CIA, lagos), and wealth of experience from practice, I have no choice but to speak the truth that there is no ECONOMIC RECESSION in Nigeria. What we are made to see or experience is PSEUDO RECESSION just to deceive the people.
Most Nigerian families are groaning in abject poverty and want due to the effect of poor governance that is experienced today. The government is claiming that there is economic recession and that we must all buckle up to expect even worse as the said recession is not expected to decline any time soon. And I ask, does economic recession linger beyond two quarters (that is six (6)months of any financial year? NO! Recession does not last beyond six (6) months in a year so why ask me to get ready for further recession crises. If it does, then it is no longer recession but early signs of ECONOMIC DEPRESSION. Economic depression is a woe nobody would want to be associated with.
I was then moved to take a professional look at the indices that characterizes true ECONOMIC RECESSION, I make bold to say that there is no genuine recession in Nigeria. What we see is pseudo recession ( ie government created recession that is made to look like real recession in the economy). truly, what we see in existence as recession is very poor liquidity circulation in the economy which is as a result of failure on the part of government to allow and ensure adequate cash distribution /supply to the economy due to serious inordinate personal ambitions by our leadership. This trend causes cash crunch in the economy and makes it look like a real recession ridden economy but it's not. It is only the poor masses that suffer this pseudo recession as designed by our politicians. The rich gets richer.
The government prefers to hide under behind the mask of RECESSION just to excuse itself from doing what government is expected to do with tax payers funds. The government technically avoids blame of ineptitude and failure with a excuse of economic recession.
ECONOMIC RECESSION DEFINITION
Economic recession is a period of general economic decline and typically accompanied by a drop in the stock market, an increase in unemployment, and a decline in the housing market. A RECESSION is less severe than a depression.
The blame for a recession generally should fall on the federal government leadership; ie either the president himself, the Central Bank governor, the minister of finance and economic planing or the entire administration as a whole and the state governments.
Recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters in a fiscal year.
Recession in any economy is characterized by a negative economic growth that lasts for at least two consecutive quarters. It is also known as a business cycle contraction which results in a general slowdown in economic activities.
Macroeconomic indicators such as the low GDP (gross domestic product), fall in investment spendings, low capacity utilization, fall in value of household income, huge drop in business profits, and astronomical rise in inflation while bankruptcies and of cause uncontrollable increase in unemployment rates remains the conspicuous elements of any recession ridden economy.
As mentioned above, recession may be triggered by various events, such as financial crisis, an external trade shock, an adverse supply shock or the bursting of an economic bubble.
Let's explain some factors that mostly leads to recession.
FACTORS THAT CAUSE RECESSION
1.) True recession does not last more than two quarters in a financial year. Where recession subsist beyond two quarters, the result would be very deep recession or DEPRESSION. So it is laughable for the government to deceive Nigerians that there is recession that have lasted beyond two quarters just to run away from responsibilities.
2.) HIGH INTEREST RATES:
High repayment interest rates is a major cause of recession in most economies because it limits liquidity, or the amount of money available to invest.
2.) Another major factor is INCREASED INFLATION.
INFLATION simply refers to a general rise in the prices of goods and services over a given period of time. As inflation increases, the percentage of goods and services that can be purchased with the same amount of money decreases.
3.) Reduced consumer confidence is another factor that can cause recession. If consumers believe the economy is bad, they are less likely to spend money because things are hard. Note that consumer confidence is mostly psychological but can have real impact on any economy.
4.) REDUCED VALUE OF REAL WAGES/ SALARIES: This refers to salaries/wages that have not been adjusted to reflect existing inflationary trends. Falling real wages means that a worker's salaries/wages is no longer able to keep up with the existing prices of goods and services (inflation). Workers might be receiving the same amount of money, but the real value/ purchasing power has been drastically reduced.
HOW TO QUICKLY TACKLE RECESSION:
The federal government is expected to be proactive in response to any recession index by adopting expansionary macroeconomics policies. These includes INCREASING MONEY SUPPLY, INCREASING GOVERNMENT SPENDINGS and DECREASING GOVERNMENT TAXATION. But unfortunately, this is not the case in Nigeria rather the excuse of recession is now used by the various governments in Nigeria to deprive the citizens of all socio-economic benefits that is expected from the government to its citizens.
IT IS GROSSLY ABSURD FOR THE GOVERNMENT'S TO HIDE BEHIND THE EXCUSE OF RECESSION TO DENY NIGERIANS THEIR EXPECTED RIGHTS AND BENEFITS FROM GOVERNMENT.
REASONS WHY THERE IS NO RECESSION IN NIGERIA TODAY:
1.) No recession ridden economy has so much money in it coffers. Nigeria has more than a trillion in its coffers at any given time. Even recovered funds is now running into trillions. In recession, the government can not have such huge cash outlay in its coffers. Since there is no cash crunch on the side of government, there can't be recession. It is grossly artificial as government failed to ensure equitable cash supply/distribution.
2.) Again, if there is recession in Nigeria the private sector especially would find it very difficult to post high billions in profits in their balance sheets. We all know and see publicity of billions of naira and dollars being posted as quarterly/annual profits made and posted by the private sector in Nigeria especially in the banking and oil sector.
3.) The estates/housing sector is still largely flourishing. New estates/ luxurious houses are springing up daily in Nigeria till date. In recession, such trends hardly exists as cash is never available for such flamboyant projects. But Nigerians still see daily huge/luxurious events/activities, vehicles, capital projects, luxuriously built schools with high fees, etc, which is built and patronised by politicians, top government officials and those of the private sector especially oil and bank workers. In recession, such cannot be in existence.
There are also several other indicators that points to the fact that the much touted recession in Nigeria is a pseudo recession that was created to deceive Nigerians into believing that there is real recession so that genuine demands by Nigerians could be circumvented by the government.
4.) The experienced unemployment is due to failure in investment and planning on the part of government.
5.) In true economic recession there is widespread inability to collect and to pay tax as most people do not even have cash to pay as tax. All people do is struggle to achieve subsistent living.
But in Nigeria today, as we see it, people and companies are forced to pay even multiple taxes even as the taxes have all been increased astronomically by the government yet government still cry recession and eager to borrow selfish loans which ends up mostly looted by the same corrupt officials. People pay levies, taxes and utility bill without the required service paid for.
6.) True recession is characterized by fall in cost of house rents/ prices of goods and services yet no cash to pay for those services. We all know that it is never the case in Nigeria today. Cost of housing, prices of goods and services including costs utilities have been in steady increase in Nigeria till date. So how can any right thinking professional agree that there is recession when the indices are pointing towards the opposite direction?
The governments in NIGERIA (must be sincere enough and stop hiding behind the mask of recession just to avoid it's duties. Do what you are constitutionally mandated to do for the common man as there is no GENUINE RECESSION IN NIGERIA.
- ALFRED AKONTE NEHEMIAH (ACIA)
