The economic system has been battered, human motion caged and turmoil in world inventory and monetary markets attributable to COVID-19 pandemic. Nonetheless, specialists say the state of affairs is redeemable, writes SINA FADARE
THE COVID-19 pandemic hit the world unexpectedly. Whereas the superior economies have been rattled and are frantically trying to find an answer after 1000’s of lives have been misplaced, the underdeveloped economies are but to get up from their slumber when it comes to confronting the lethal virus and its hostile impact.
The consequences of the pandemic on the economic system and all different areas of human endeavour have been devastating due to the poor well being system and the nation’s mono-economy that has been operational for a few years. The state of affairs has led to the unprecedented disruption of meals chains, discount in crude oil worth and whole lockdown of all financial actions.
Based on analysts, the hostile results on important sectors akin to oil and gasoline, airways, manufacturing and client markets have been largely as a result of mono-economy which the nation has operated for a few years till currently when agriculture is being thought of as a substitute for oil when it comes to income incomes and meals safety.
Maybe, the Central Financial institution of Nigeria (CBN) had the premonition of this calamity a couple of years again when it gave agriculture a pep in its intervention programmes.
Anchor Borrower Scheme grew to become useful and the saving grace for farmers. The scheme, which was launched by Buhari in 2015, was designed to empower farmers to make sure meals safety.
Based on the Director, Company Affairs of the CBN, Mr. Isaac Okoroafor, over 2.5 million farmers have benefited from the scheme in about 17 agricultural commodities.
Savouring the financial good points of those intervention programmes, the difficulty of border closure crept in, a coverage that didn’t go down nicely with a few of our neighbouring international locations and was closely criticised.
Nonetheless, shedding extra lights on the closure of the border, the CBN Governor Godwin Emefiele identified that “we aren’t saying that the borders must be closed in perpetuity, however that earlier than the borders are re-opened, there should be concrete engagements with international locations which are concerned in utilizing their ports and international locations as touchdown ports for bringing in items meant for native consumption, it’s comprehensible,”
He additional defined that earlier than the closure of the border, the Rice Processors Affiliation of Nigeria has nothing lower than 25,000 metric tons of milled rice which they can not promote attributable to saturation of the market with imported rice from the Republic of Benin, including that simply after per week of the closure of the border, all of the rice have been bought.
The CBN boss emphatically mentioned the closure of the border has introduced an excellent tiding to the Nigerian economic system.
“So, on what the advantages of the border closure on the economic system of Nigeria are, I simply used two merchandise – poultry and rice. The profit is that it has helped to create jobs for our individuals, it has helped to convey the built-in rice milling within the nation again into the enterprise and they’re creating wealth.
Although the COVID-19 pandemic has negatively affected the economic system and the lockdown not solely collapsed plenty of companies but in addition opened a window of starvation for artisans who majorly trusted day by day hustling for his or her survival, a state of affairs that has invalidated earlier good points earlier than the pandemic.
Talking to The Nation on the flexibility of the nation to shortly return to its financial hub that has inspired a paradigm shift from oil and gasoline to agriculture and agro-allied ventures, Mr. Mike Osagie, an economist, famous that although the pandemic took the nation without warning, the agricultural programmes embarked upon by the Federal Authorities a couple of years in the past had made meals out there, in any other case the nation would have been worse hit.
Osagie additional defined that plenty of classes has been learnt in the course of the lockdown which might encourage the federal government to placed on their pondering cap and deal with all of the important space akin to well being amenities, including that it ought to focus extra on agriculture and let the farmers be the centre of focus to make sure meals sufficiency and creation of extra jobs.
Based on him, post-COVID-19 must be a brand new Nigeria the place large diversification in agriculture is made crucial.
”Because the CBN received it proper attributable to a few of its intervention programmes for farmers, producers and small-scale enterprises. It will go a good distance in restoring all of the financial losses in the course of the lockdown.
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Nonetheless, the CBN, to cushion the impact of the pandemic on the economic system, took some radical steps to satisfy the yearnings of the individuals. The Director, Monetary Coverage and Regulation of the apex financial institution, Mr. Kevin Amugo famous that the financial institution is dedicated to offering help for affected households, companies, regulated monetary establishments and different stakeholders to cushion the hostile financial influence of COVID-19.
Amugo identified that every one CBN intervention amenities are granted an extra moratorium of 1 yr on all principal repayments efficient March 1, which signifies that any intervention mortgage could have extra one yr to pay up, including that collaborating monetary establishments are to offer new amortisation schedules for all beneficiaries.
Along with this, the apex financial institution mentioned all rates of interest on all relevant CBN intervention amenities are hereby decreased from 9 to 5 per cent for one yr efficient from March 1, 2020.
Based on him, the financial institution has established a facility by means of the NIRSAL Micro Finance Financial institution for households, small and medium-sized enterprises (SMEs) which were notably laborious hit by COVID-19, together with, however not restricted to hoteliers, airline service suppliers and well being care retailers.
He defined that the CBN has prolonged its grants to all Deposit Cash Banks to contemplate short-term and time-limited restructuring of the tenor and mortgage phrases for companies and households most affected by the outbreak, notably oil and gasoline, agriculture and manufacturing.
Amugo famous that the financial institution is able to take into account extra incentives to encourage the extension of longer-tenured credit score amenities and supply liquidity backstops as and when required given its position as Banker to the Federal Authorities and lender of final resort.
Assessing the state of affairs, Adetunji Ogunyemi, an Financial Historian and lawyer who equally doubled because the Appearing Head of Division of Historical past, Obafemi Awolowo College, Ile-Ife, famous that 4 important classes have been learnt from the lockdown attributable to COVID-19 pandemic.
In a chat with The Nation, Ogunyemi mentioned the Nigerian economic system has been based on a particularly fragile pedestal of mono-culturalism attributable to its extreme dependence on oil income and export whose well being and viability are externally decided.
“The true sectors of the Nigerian economic system akin to agriculture, industries and manufacturing, which ought to have employed the most important proportion of the Nigerian populace, have been uncared for for too lengthy and this has been to the peril of the economic system.”
He defined that the personal sector, particularly within the areas of transportation, small and medium-scale enterprises maintain the important thing to the nation’s financial growth and never an over-bloated public sector that consumes greater than 70 per cent of whole authorities expenditure however can’t defend the economic system in important intervals akin to this.
Based on him, actual and efficient governance occurs on the state and native authorities ranges, including that the time has come to devolve extra powers and assets to these ranges by restructuring the facility equation within the nation beneath the Structure of the Federal Republic of Nigeria.
The don defined that there are plenty of issues that may be put in place in order that the economic system will bounce again in a post-COVID-19 pandemic. This contains the fact that the personal sector holds the important thing to the nation’s economic system which authorities in any respect ranges should key into and provides help to Small and Medium-Scale Enterprises (SMEs).
Ogunyemi famous that the Federal Authorities additionally wants to scale back the price of governance by faithfully implementing many of the suggestions contained within the Steve Oronsaye’s Report on reforming the federal public sector.
He mentioned: “We don’t want a public service that’s consuming the most important proportion of assets, generally as much as 80 per cent of the entire budgetary expenditure. It’s time we decreased the price of governance after which improve productiveness by means of redirection of finance in favour of personal sector investments in agriculture, mining, manufacturing, industries and schooling.”
He argued that the time has come to restructure the nation together with aggressive federalism.
“The states of the federation must be centres of funding and progress and never of distribution of income from the Federation Account.
“There must be, for now, a suspension of the implementation of the 7.5 per cent Worth Added Tax. The previous fee of 5 per cent ought to nonetheless subsist till the yr 2021. That is to permit the SMEs to get well from the massive losses that the lockdown had inadvertently induced them and likewise to stimulate demand and consumption,” he mentioned.