By Valentine Amanze, Online Editor
Nigeria must avoid the mistakes of past economic recession for it to survive the current one caused by the coronavirus (COVID-19) pandemic.
The Vice Presidential candidate of the People’s Democratic Party (PDP) in the 2019 general elections, Mr Peter Obi, gave the advice on a programmeanchored by Arise TV.
While agreeing that the recent recession affected about 40 countries around the world, Obi warned that it would bite harder on Nigeria because the country already had “underlying economic conditions” ranging from extreme poverty, high unemployment rate, high number of out-of-school children, highest infant mortality rate and soaring incidences of drug abuse, among others.
He explained that unlike the previous recession, where Nigeria recklessly borrowed its way out, the present one demands fiscal discipline for the country to scale through.
He argued that the COVID-19 fiscal stimulus of about $5 billion provided by the Federal Government to recover the economy, was too low.
The Anambra State former governor said such an amount would have little or no positive impact on the economy.
Comparing Nigeria with nations like India, Obi said they were spending around $300 billion to help them exit the recession, out of which $50 billion is for supporting small businesses.
He further said that what was more worrisome, was that even the little fiscal stimulus provided in Nigeria was not getting to the right people and are not well accounted for.
He was optimistic that Nigeria’s economy would bounce back if government supports small businesses.
His words: “When government supports and empowers small businesses, there will be greater productivity which will reduce unemployment, generate more revenues for the government and increase development in the country.
“China, for example, finances most of their budgets with taxes from small businesses because they have a strong MSME sector that contributes greatly to their economy”.
Obi also suggested a private sector-driven economy that would lift many financial burdens from the government.
He said that the government could partner with private companies on road construction and maintenance and other public utilities.
Apart from generating more revenues for the government, Obi said that such moves would help curb wastage and financial imprudence associated with the public sector.
He further called on the government to ensure that every kobo borrowed in the country was put into productive use and not consumed or wasted.
He advised Nigerians to focus their strength on building the nation’s economy and not be distracted by any political drama going on in the nation.