By Boniface Chizea
There has been some perceived preoccupation with the Nigerian economy and what sort of challenge would be confronted in managing it post the pandemic. This is to be commended as it shows a presence of mind which in spite of the uncharted waters which this pandemic represents, still finds room to address the felt need to avert our minds to this uncertain future.
The first uncertainty which confronts us as we attempt this discussion is the fact that no one knows when or how the pandemic is going to end except of course we discover an efficacious vaccine. We are now going through a phase of gradually easing of the lockdown not because of the fact that we have attained a flat infection curve but for the main consideration that life must go on.
Across the globe, there is this felt weariness with the lockdown of the economy almost becoming indefinite. Therefore, what is happening is an attempt to live life as much as it is possible while taking steps to reduce the fatalities due to the pandemic. What has really been made clear so far is that Coronavirus is not a death sentence.
It becomes deadly when there is a predisposing underlying health condition particularly if respiratory and also among the elderly whose immune system had been compromised. Therefore, logically the starting point for this discussion is to ask what the economy post CODIV 19 would look like to help us hazard a guess about how best to manage it.
What is certain is that whenever the pandemic comes to an end the new normal will be different from the profile of the economy we have been used to. A major casualty due to the pandemic is the fact of the end of globalization which has been promoted over some decades now to capitalize on its specialization and economies of scale potentials. This observation is not surprising as for the first time in recent human history all countries were at the same time similarly confronted by the devastating effect of the virus and logically the orientation became to your tents oh Israel.
Therefore, we shall be confronted with an economy for which we would have no choice but to aim to be self-reliant for its supply chains. Import substitution efforts which recently has been championed by the Central Bank would now no doubt assume pride of place considerations and this development would be posing considerable challenge as we manage the economy in this era.
The other factor that would characterize this new economic order will be the impact of digitalization. During the period of the pandemic, it became fashionable to hold remote meetings. The Zoom Application became ever so popular that hardly one day passes without one Webinar or the other being advertised. And the finder of the Zoom App. has since been smiling to the bank. Even companies held their AGMs and even the Institute of Bankers’ of Nigeria held its investiture as the mantle changed hands adopting this virtual approach. Most businesses embraced online marketing of their products and services and experts were even recruited online. There is no doubt that virtual meetings whose benefits have as it were now been well advertised and popularized would be a regular feature of the new order.
The first challenge to confront is to ensure that the opportunity of the pandemic is not allowed to go to waste. This will mean that some of the laudable schemes in hand would have to be continued. The palliatives cannot be discontinued in the immediate aftermath of the pandemic. The cash transfers will have to continue and be better organized and made as inclusive as possible.
There is no part of this country without its own share of the poor and the methodology for deciding beneficiaries should be better organized and as much as possible automated. A situation whereby cash notes were being handed over to beneficiaries on a queue as the world watched is not befitting of the stature of this country. We must evolve some way of making transfers through bank accounts or some other more respectable manner and as we adopt this approach, we aim to upgrade the level of inherent accountability and overall transparency.
We have been informed that the oil market has now been deregulated as we seized the opportunity of the free fall in the price of fuel. But we still hear talk of some system of price modulation. Whatever we do, we must not go back again to the era whereby we make budget allocations for the payment of subsidy often denying other important sectors of the economy much needed commensurate urgent funding.
There was a report that Budget 2020 was reviewed as the price of crude went onto a free fall. It is advisable that a supplementary budget is prepared in such a manner to confront all the demons that have assailed our budget preparations over the years. It is time to address the relatively bloated recurrent expenditure in the budget.
Salaries, wages and remuneration across board must be up for review particularly those of the legislature which have been mentioned as not in any way aligned to the dire economic realities of the economy. The orientation of the budget must be now pro poor as evidenced in the amount of allocations we make to the various Budget heads. For a long time now, there is this clamour as an attempt is made to decry the paltry allocations to the social sectors of health and education. It is time to attempt to make allocations in way that recognizes the benchmarks as provided by Organizations that have particular responsibility.
For instance, UNESCO recommends that 26% of the Budget should be allocated to Education but we have never gone beyond single digit. Similarly, the allocations to the health sector whose state of terrible condition the pandemic helped to advertise glaringly to the embarrassment of all stakeholders. Of course, it goes without saying that is not time to accommodate such white Elephant projects in the Budget such as the purported allocation of 37 billion Naira in Budget 2020 for the renovation of the National Assembly complex.
It was reported in the heat of the pandemic that the President has authorized the implementation of the Orasanye Report which goes back to 2012. In the first place this report has been overtaken by events. When it was prepared the number of ministries, agencies and departments were about 500 but now we have almost double that number. So, what does it mean to implement?
But it is in order to caution that this is not the time to embark on massive layoffs of personnel. It is rather time to galvanize efforts to ensure that workers are kept at work in both the public and private sectors even if it will result in fiscal authorities bearing some of the burden to enable the private sector to do so. We cannot be giving out palliatives with one hand and turn round to approve massive sack of workers. That will be inconsistency of the highest order. This is time to deliberately keep citizens at work. In fact, we should go as far as to recommend that we should embark on public works even with the sole aim to keep able body citizens in gainful employment.
The fear has been expressed that beyond June 2020 the amount of money available for the Federation Allocation Account might not be adequate for the payment of salaries by the State Governments. There are also groups of workers that are reported not to have been paid salaries for months now including medical doctors. It is time to prioritize the payment of workers’ salaries and wages so that we do not multiply the misery index in the land.
The Central Bank of Nigeria has put out well thought through package of palliatives for the benefit of the vulnerable sectors of the economy of a total amount of N3.5 trillion which has been sequenced to be doled out in three phases; immediate, up to one calendar year and up to three years. In this package provisions for funding have been made for households, Small and Medium Scale Enterprises; the engine room of the economy and those engaged in the provision of laboratory services as well as pharmaceutical services. All efforts must be made by the monetary authorities to ensure that this target funds are made available to the citizens so that the impact could be immediately felt with all the concessions in interest charges, moratorium as advertised accompanying the disbursements of the funds.
My one wish is that we will look back some years from now and be in a position to pinpoint some of the benefits that have accrued to the citizens of this country as a result of the pandemic experience. May the vaccine be found to help us exit this nightmare in the shortest possible time. Amen
Dr. Boniface Chizea, an economist and former banker, wrote in from Lagos
