Borrowing: Nigeria’s Economy May Slide Into Recession Again in 2020 If – NGF Chairman – Yari

BY AMOS DUNIA, ABUJA – The Chairman of Nigeria Governors Forum (NGF), who is the Governor of Zamfara State, Alhaji Abdulaziz Yari, on Monday painted a gloomy picture of the shape the nation’s economy may take in 2020.

Yari, told Governors-elect and those returning at an induction programme taking place at the Conference Centre of the Presidential Villa, Abuja, that except something drastic is done, Nigeria’s economy would slide into another recession again.

The NGF Chairman specifically advised the Governors-elect to get ready for a possible recession by the mid-2020 that may extend to the third quarter of 2021. Nigeria officially entered recession for the first time in more than two decades, in August 2016, after the economy contracted two conservative times

Governor Yari said the outgoing governors agreed and resolved that borrowing is not a reliable alternative to solving economic problems thus urged the Governor-Elect and other ties of government to work towards increasing revenue generation bases with a view to change the course of doing business by the government for the good of the people.

According to him; “This is a wake-up call for all of you to come amply prepared to face these kinds of challenges especially since we are expecting the possibility of another cycle of recession by mid-2020 and which may last up to third quarter of 2021.

“Your good spirit of stewardship will make you contain the situation should there be one. Also, as members of the National Economic Council, you must work hand in hand to boost the economy in tandem with the global best practices.

“On our part, we made a lot of achievements in infrastructural development and provision of social services because we enjoyed a relatively high oil price of about $100 to $114 per barrel between 2001 and the middle of 2014.

“However, by the mid-2014, the price of crude oil, which is sadly the main driving force of government’s expenditure, dropped to $75 per barrel. It, therefore, became very difficult for many states to even pay salaries of their workers.

“Experience, they say, is the best teacher. Ours has been a challenging experience of managing state economies that are totally dependency on accruals from the federation account rather than exploring viable alternatives to run the economy.

“For most of the states, internally generated revenues are nothing to write home about. You must, therefore, look inward by boosting your revenue generation base and also utilize them effectively for execution of projects that would touch the lives of your people. You must not forget the high expectations of our people on us; now that the democracy is maturing day in day out, the challenges of governance and service delivery are more demanding.”

Governor Yari also said that the NGF and the National Economic Council led by Vice President, Yemi Osinbajo, have agreed that borrowing is never a reliable alternative to solving economic problems.

“Key revenue agencies like the Nigeria National Petroleum Corporation, Federal Inland Revenue Service, the Nigerian Customs Service and other agencies must be made to work more effectively now that Mr. President has signed the much awaited National Minimum Wage law, pegging the minimum workers’ salaries at N30,000 per month.”

Yari advised the Governors-Elect to strengthen tax laws to encourage Nigerians to pay their taxes, even as he noted that people have negative attitude to payment of taxes in full, including corporate agencies. 

In his words; “My take on this is that, as a country with over 200 million people, our individual and collective contributions in ensuring prompt payment of taxes can help the government achieve all its objectives. For us to achieve these responsibilities, we have to strengthen our tax laws and to make them very effective in our task of building a better Nigeria. 

“If the necessary measures are put in place to provide a working system, I am certain that at the end of the day, we are going to succeed in tackling unemployment, reducing poverty, ensuring food security and disease control as well as building a nation with a robust economy.”