Governors to Nigerians: Prepare for fresh recession

April 30, 2019

The Nigerian Governors’ Forum (NGF) has told Nigerians to prepare for another cycle of economic recession by mid-2020. The forum also advised new and returning governors not to rely on external borrowing as a means of solving the economic challenges that they might face in their states. Outgoing Chairman of NGF, Governor Abdulaziz Yari, who gave the warning yesterday at an induction for the governors, said the recession may likely last up to the third quarter of 2021. Yari, who is also the outgoing governor of Zamfara State, said this was a wake-up call for the new state chief executives to prepare to face the challenges, especially now that President Muhammadu Buhari has signed the national minimum wage law, which pegged the minimum workers’ salaries at N30,000.

“This scenario 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 the mid-2020. “This may last up to the 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,’’ the governor said. According to him, the new and returning governors should look inward on how to boost their revenue generation base, especially their internally generated revenue (IGR) to enable them execute people-oriented projects and reduce overdependence on the Federation Account.

“Ours has been a challenging experience of managing state economies that are totally dependent 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,” the governor noted. He told the governors that it may not be smooth ride for them, noting that the achievements recorded by their predecessors between 2011 and 2014, was because of a relatively high oil price of between $100 and $114 per barrel.

“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,” he added. Yari noted that there was no better time to pay more serious attention to the issue of economic diversification than now when the world is moving away from carbon fuel to biofuel and electronic vehicles. “It is expected that by year 2030, most vehicles in advanced countries would be powered by electricity, which is green friendly, with low carbon emission.

When this happens, it will spell doom for our economy if we have not diversified,” he further warned. According to him, diversification of the economy would entail shifting away from reliance on export commodity and focusing on sustainable growth and genuine development to achieve industrialization.

He, therefore, challenged the new and returning governors to seek a way of boosting their economic base and to utilise them effectively for execution of projects that would touch the lives of the 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. “It is also a source of worry to all reasonable observers that in all modern economies, it is the public that drive the government by supporting it through payment of their taxes as and when due. “In our situation, the reverse is the case. It is very unfortunate that our people have a very negative attitude to payment of taxes in full, including corporate agencies,” he stated.

He called for strengthening of the nation’s tax laws to make them very effective, and expressed the confidence that if necessary measures were put in place, Nigeria would succeed in tackling unemployment, reduce poverty and ensure food security with a robust economy. In an interview with newsmen, Bala Mohammed, Governor-elect for Bauchi State, said that the inductees should see themselves as those called to duty and work toward delivering the dividends of democracy to the people. “I listened to the development partners and what the vice president said, government is a collective responsibility. Government is a trust and we should rediscover ourselves. “We should know that we are privileged out of 200 million, 74 of us have been elected as governors, as deputy governors, as president, as vice president, we must be able to deliver, to leave legacies and landmarks,” he said. On his part, the Governor- elect of Imo State, Emeka Ihedioha, said he would look at ways of improving the IGR of the state. He said he was looking forward to running an inclusive government that would factor in all shades of opinion.