As Nigeria turns 60, Mr Tope Fasua, an Economist, has called on the government to think outside the box and take practical steps to grow the economy.
Fasua is the founder and Chief Executive Officer of Global Analytics Consulting Limited, a consulting firm.
He gave the advice on Thursday, in Abuja.
Fasua said mechanisms for sustainable economic growth needed to be worked out faster.
“The Nigerian economy has underachieved since independence in 1960. We could have run faster, but as it is, I still see the economy as a toddler economy. A 60-year-old person should not be called a toddler, but as nations grow, Nigeria is still a toddler because we are still limping along, and we produce absolutely nothing. If we ensure that public resources are deployed for public good, the country will be a lot better than it is right now. We need to be planning bigger and planning faster and doing great things”.
Fasua observed that the COVID-19 pandemic had lowered the confidence of investors, resulting to job losses and increased unemployment.
He advised that government must consider the recent Performance Managers’ Index (PMI) survey released by the Central Bank, which indicated a fifth, consecutive decline in the manufacturing sector.
The economist said government, in view of this, should take steps to make the economy grow faster.
Recall that the CBN revealed in a survey that the PMI further contracted for the fifth consecutive time in the month of September, at 46.9 index points.
“As a result of the effects of COVID-19, the confidence of investors and even buyers is still low. To a large extent, many employers have been forced to retrench part of their workforce, while others have reduced their capacity. The PMI is a guage of official performance of the economy. People want to see what government will do as ‘out of the box’ policy to take the economy back on track”.
Fasua said the government should focus more on challenges of expenditure rather than revenue, to reduce cost of governance.
“It is wrong to assume that what we have is a revenue problem. Government says this because it is concerned about getting revenue from the citizens through taxes. If we can reduce irrelevant expenditure and focus on the things that matter alone, then available revenue can be deployed properly and we can even project into the future”.
Fasua said the idea of government to create ‘directors of treasury’ in government departments and agencies was not advisable.
“One of the things government should do is to prune down its bureaucracy rather than enlarge it”.
Fasua lauded the central bank’s Monetary Policy Committee (MPC) reduction of interest rate as a move to spur economic growth.
“The idea of the MPC is to drive down interest rates by indicating to the commercial banks what the outlook of the monetary policy planners is about. It is to indicate that there would likely be a drop in rates in order to spur economic growth. The more the rates are reduced, the more people can get money from banks and the more the banks are incentivised to give out money rather than just sit on it. It is good for the economy, but it is left to be seen whether the economy will react immediately for the better”.
The economist, however, warned that the step could worsen inflation.
“Though intentions of the MPC are good, the flipside is that inflation is likely to go up”.