Recession not death sentence for Nigeria – Ntoh

World Bank Consultant, former Finance Commissioner and Provost Abia State College of Education (Technical), Dr Philip Ntoh, in this interview speaks on Nigeria at 56, prospects, challenges, and way out of recession, reports Sam Egburonu
As Nigeria celebrates its 56th Independence Anniversary, economic challenges have raised fears in the eyes of many. What will you consider the prospects and challenges?

 
We are glad that Nigeria is 56 and you know we have passed so many challenges. After independence, barely six years, we had the first civil war which means it was not easy for Nigeria to take off ab-initio. So, after the civil war we have also had other types of wars which may not be civil war but economic war. We have not been able to make it economically though the prospect is there as a nation, given the population size which is an indication of market size. So, by implication, a country with such magnitude of population should be able to excel economically but this won’t come until you do the right things. If you look at it from the area of agriculture we have the land mass, not just land mass but fertile and arable land but we have not fully tapped from that particular potential. We also have very good climate condition which is also conducive for agriculture. So, I wonder why a nation with this kind of potential is not able to diversify into agriculture because a situation where you have good climatic condition from rainy season you enter the dry season. There is nothing like snow, you know snow is not conducive for agriculture. If you go to some temperate regions, they equally convert the snow into rain. Nigeria is the only country where if you lick an orange, paw- paw or anything and throw it away, it germinates. This is not so in the temperate region. If you go to Israel or even in the United States, it’s not possible.
It means we have not been able to tap on that. We also have a country endowed with so many minerals; we have the solid minerals but unfortunately we only place emphasis on crude oil mineral resources; that is the major problem of Nigeria. A country that only places its economic emphasis on only one product will face economic doom, that is why we are into this problem today. The recession they are talking about is because greater proportion of our GDP is from crude oil. What is recession? It is when the real GDP is on the negative growth for two consecutive quarters. And why do we have negative GDP in two consecutive quarters? It is because the price of crude oil has been on the negative growth from twenty something dollars to thirty something, to forty something and back to thirty something. That is just the major reason.
Had it been we are able to diversify our economy when the crude oil is not working, agriculture is working; when agriculture is not working then solid mineral is working and other ones. But this time around its only crude oil and that is the major problem.
From what we can see, government is not doing much to revive the economy towards the part of growth because a situation where the emphasis is being majorly placed on how to increase oil production, everything only on oil, then I don’t think there is prospect in that direction.
The only thing I may say is that we must diversify the economy.  Let us strengthen the other sectors of the economy, especially agriculture. Somebody from Europe was telling me that the price of honey there is about 400 dollars for a barrel while the price of crude oil is 47 dollar per barrel, so which one will make better economic sense? The potentiality is there to tap from the bee farming. What should we then do? As a nation what we should do is to subsidize that sector, subsidize the production towards that direction but you see the problem with Nigeria is that we subsidize consumption instead of production. A situation where you subsidize consumption without caution you create a situation where you have lazy people and the people will be reluctant to work. That is part of our problem. That is why our economy is not productive.
What do you suggest as short term measure in this time of recession?
I am an economist that don’t always subscribe to short term measure but I believe mostly in long term but that notwithstanding there is nothing wrong in government providing palliatives in the area of food to reduce hunger in the land. In the case of long run for instance the Premier of Eastern Region provided a lot in the area of agriculture but that was not built upon by subsequent governments. This is the sad case in some other parts of the country. The truth is that if you remain with the short term measure you will still see the problem knock at your door. In long term measure you only suffer for a while. Several developed countries suffered the same fate we are passing through now. Short term measure may imply borrowing, which is what the federal government is talking about. I don’t believe in borrowing unless if it’s on production purpose. If you borrow without using the money judiciously, you are still postponing the evil day which will definitely come. Unless if you borrow to diversify the economy, to invest in infrastructure but not to borrow to consume. See a situation last year when the CBN released bailout for states, what happened? I believe the states should face their economic challenges and come out of it.
But in other climes they do give bailout sometime?
When you use the bailout to subsidize production, fine, it will make economic sense not a situation where you use the bailout to subsidize consumption.  When you think of how to feed that is a short term measure. We should think about how to redirect the economy towards the part of growth. Recession is not a death sentence as most people think or say. Even depression is not a death sentence; it is part of economic business circle, it’s natural. It is just like the human body and I do explain that to my students as then university lecturer. In human being, you have the ups and downs. There may be sometimes you will be in a bad, depressed mood. When you are in a depressed mood it does not mean you will not get out of the situation and feel good or high another time. Some people when they are depressed take what is described as stimulant. The mood will move up and at other time the mood also comes down. It is same with the economic business circle. When the economy is moving towards depression what you do is to inject funds into production. Once you do that, you discover that the economy will move up again, that is when we say you are stimulating the economy.
Some critics blame the current economic team. Do you share this view?
Nobody knows it all. The economic team may not be the best but they can consult. When they consult with other experts they will come out with the best solution to our situation. A medical doctor that owns a hospital may not be the best, In fact he simply specializes; that is why when he gets complicated cases, he invites other consultants to come and assist.

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