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Economy & Politics

Recession: Economy should be redirected from wasteful consumption to productivity – Peter Obi

Peter Obi has warned that that the current recession could be worse than that of 2016, because debt raised by the administration was not properly invested.

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Katsina Abduction, Recession: Economy should be redirected from wasteful-consumption to productivity — Peter Obi

Former Governor of Anambra State, Peter Obi, has said that Nigeria needs to trim the unnecessary expenditure on its budget and redirect the economy towards a production-based one. He also warned that that the current recession would be worse than that of 2016, because debt raised by the administration was not properly invested.

Peter Obi disclosed this in a social media statement on Sunday and in an interview with Channels TV.

READ: Afrinvest cautions FG on World Bank’s EoDB ranking

(READ MORE: Nigeria is in a weak financial position to absorb recession shocks —Bismark Rewane)

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“For Nigeria to pull itself out of this economic recession, the 2nd in the last 5 years, there’s a compelling need to cut the pork out of the budget and expenditure at all levels of government and redirect the economy from a wasteful consumption-based one to a productive economy,” he said.

He mentioned in his TV interview that Nigeria should emulate other countries trying to pull out of the economic mess by concentrating on improving monetary and fiscal policies.

READ: NBS hits back at Prof Hanke, says Nigeria’s inflation is not 33%

READ: Surviving the looming recession in the Nigerian tech space

He said that the October protests were signs that politicians needed to sit up in order to arrest the situation before it gets worse.

“Every other country is discussing the recession and how to pull their people out of poverty. So, what we should do now is concentrate on the monetary and fiscal policies to start pulling people out of poverty.

“If you see what happened with the recent protests, you could see that we are heading into a problem. And I want our energy to be concentrated on that problem. The politicians, the class where I belong, should do more seriously, across party lines, to be able to arrest the situation before it gets out of hand,” he said

(READ MORE: Nigerians pay heavy price as laptop scarcity bites harder)

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He also stated that priority should be on putting food on the table now instead of discussing the 2023 elections.

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“For me, it is in discussing how do we put food on people’s table. Elections will come and we can see how to select the best. But let’s deal with the recession we have just entered before 2023.

“This recession is going to be worst than in 2016 because the monies we borrowed then were not properly invested.

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READ: NNPC, only Nigerian company to cut losses by N800 billion in one financial year – GMD

“What we need now is to go into a vigorous regime of formulating implementable and measurable monetary and fiscal policies to drive ourselves out of the present situation,” he said.

What you should know 

Nairametrics reported that Nigeria’s Gross Domestic Product (GDP) in real terms declined by -3.62% (year-on-year) in Q3 2020, thereby marking a full-blown recession and second consecutive contraction from -6.10% recorded in the previous quarter (Q2 2020).

READ: Citibank: Bitcoin could skyrocket by $300,000 in 2021

Former Vice President of Nigeria, Atiku Abubakar, had warned that Nigeria must stop borrowing for anything other than essential needs. He added that very non-essential line items in the proposed 2021 budget must be expunged in a bid to kick-start the economy from a recession.

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1 Comment

1 Comment

  1. Olufemi

    November 25, 2020 at 10:21 am

    Zainab Usman shd just go,our economy is terribly bashed and ppl r dying 9f hunger & hardship.Emefiele too has failed,still wondering y PMb still keeping ds 2 has has exhausted all they got instead situation keep worsening,cant imagine that a president will be on seat n watch his currency loosing value every other day,now $ is almost #500,pls its tym Buhari sack ds ppl &bring back Kemi Adeosun to revive d mattered economy since his team has failed woefully.

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Coronavirus

IMF optimistic about global economy but warns new Covid variants could affect recovery

IMF is quite optimistic about the fortune of the global economy but expressed fear that the new Covid variant could derail economic recovery.

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IMF

The International Monetary Fund (IMF) has expressed optimism about the global economy but warns that the new COVID 19 variant could affect the global economic growth, according to its latest World Economic Outlook.

According to the report, “the institution now expects the global economy to grow 5.5% this year — a 0.3 percentage point increase from October’s forecasts. It sees global GDP (gross domestic product) expanding by 4.2% in 2022”.

According to its Chief Economist, Gita Gopinath:

  • “Much now depends on the outcome of this race between a mutating virus and vaccines to end the pandemic, and on the ability of policies to provide effective support until that happens.
  • “There remains tremendous uncertainty and prospects vary greatly across countries.
  • China returned to its pre-pandemic projected level in the fourth quarter of 2020, ahead of all large economies. The United States is projected to surpass its pre-Covid levels this year, well ahead of the euro area.
  • “Policy actions should ensure effective support until the recovery is firmly underway, with an emphasis on advancing key imperatives of raising potential output, ensuring participatory growth that benefits all, and accelerating the transition to lower carbon dependence.”

What you should know

  • There has been a surge in the number of reported cases of the new variant Covid-19 infections and deaths over the past few months.
  • The new variant has been described as being more infectious and potentially deadlier than the original strain.
  • The IMF had cut its GDP forecasts for the euro zone this year by 1%.
  • It is being projected that the 19-member region, which has been severely hit by the pandemic, would grow by 4.2% this year.
  • Germany, France, Italy and Spain — the four largest economies in the euro zone — also saw their growth expectations cut for 2021.
  • Economic activity in the region slowed in the final quarter of 2020 and this is expected to continue into the first part of 2021. The IMF does not expect the euro area economy to return to end-of-2019 levels before the end of 2022.
  • IMF revised its GDP forecast upward by 2% points on the back of a strong momentum in the second part of 2020 and additional fiscal support, with GDP expected to grow to 5.1% this year.

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Economy & Politics

Updated: President Buhari appoints new Service Chiefs

President Buhari has appointed new Service Chiefs to replace the former with immediate effect.

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PIB; Will the jinx be broken this time around?, President Buhari may sign 2020 Budget tomorrow, President Buhari approves N37 billion for National Assembly renovation, President Buhari appoints Sarki Auwalu to head DPR , FG may stop interstate and inter-town travels, COVID-19: President salutes Elumelu, Dangote, Atiku, Banks, others for support, Naira export earnings, Covid-19: FG to set up N500 billion intervention fund, sovereign wealth, FG issues guidelines on implementation of gradual easing of lockdown nationwide, Electricity: FG approves one year waiver of import on meters, Buhari backs Lagos State Government Judicial Panel of Inquiry

President Muhammadu Buhari has appointed new Military Service Chiefs, and congratulated the outgoing Service Chiefs for efforts of “enduring peace to the country.”

The appointments was disclosed by Presidential media aide, Femi Adesina in a social media post on Tuesday.

Adesina said: “PMB appoints new Service Chiefs. Maj Gen LEO Irabor, CDS, Maj Gen I Attahiru, Army, Rear Adm AZ Gambo, Navy, AVM IO Amao, Air Force. He congratulates outgoing Service Chiefs on efforts to bring enduring peace to the country.”

President Buhari had come under heavy criticism in the last couple of years over his failure to sack the Service Chiefs for failing to tackle insecurity in the country.

“I have accepted the immediate resignation of the Service Chiefs, and their retirement from service. I thank them all for their overwhelming achievements in our efforts at bringing enduring peace to Nigeria, and wish them well in their future endeavours,” Buhari disclosed in a separate statement.

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What you should know: The outgoing Service Chiefs were appointed by President Buhari in 2015 and despite clamour from several quarters for the President to replace them with fresh blood, nothing happened until today’s announcement.

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Economy & Politics

Investing in digital economy, infrasture crucial to mitigate impact of COVID-19 pandemic – World Bank

Investing in digital economy will be crucial to mitigate the impact of COVID-19 and foster a sustained recovery in Sub-Saharan Africa.

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World Bank, Focus on lifting people out of poverty - World Bank tells FG , World Bank, IFC to assist in solving Nigeria’s infrastructure deficit , EXCLUSIVE: World Bank tasks developing nations to tap opportunities in GVCs, Warning signs: Nigerians living in extreme poverty might increase by 30 million – World Bank, US, China and UK’s protectionism ambition to affect Nigeria’s export, FDI , Terrorism bane to Nigeria's Agric development - World Bank

The World Bank has asserted that investing in the digital economy and infrastructure will be crucial to mitigate the impact of the COVID-19 pandemic and foster a sustained recovery and foster a sustained recovery in Sub-Saharan Africa.

This is according to the World Bank In Africa report – #AFRICAN CAN.

The report noted that in a time of Covid-19, dominated by lockdowns and social distancing, investing in the digital economy and infrastructure will be crucial to mitigate the impact of the COVID-19 pandemic and foster a sustained recovery.

It argued that the adoption of digital technologies by governments, households and firms in Sub-Saharan Africa still lags behind that of other regions in the world.

The report, therefore, maintains that government intervenes to reduce the cost of devices and services, avoid disconnections for lack of payment, and increase bandwidth will be key, considering that the road to economic recovery is projected to be long and arduous.

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What they are saying

The report states that:

“The road to recovery will be long and arduous and will require policies and investments that focus on connecting people to job opportunities, which can help end extreme poverty, particularly post-COVID-19.”

What you should know

Even though the World Bank did not suggest the form that the policies and investments would take in the report, the Bank, in a separate report — flagship report – Global Economic Prospects – as reported by Nairametrics on the 19th of January, 2021, has argued that productivity-enhancing structural reforms are required for quick economic recovery.

The Bank suggests these productivity-enhancing reforms encompass promoting education, effective public investment, sectoral reallocation, and improved governance. Investment in green infrastructure projects can provide further support to sustainable long-run growth while also contributing to climate change mitigation.

According to the report:

  • Sub-Saharan Africa is home to more than 1 billion people, half of whom will be under 25 years old by 2050.
  • It is a diverse continent offering human and natural resources that have the potential to yield inclusive growth and wipe out poverty in the region, enabling Africans across the continent to live healthier and more prosperous lives.
  • With the world’s largest free trade area and a 1.2 billion-person market, the continent is creating an entirely new development path, harnessing the potential of its resources and people.
  • Knowledge is essential for governments to make better policies and institutions to make more effective decisions, thus, governments should pay attention to research and analysis.

According to World Bank’s Flagship report – Global Economic Prospects.

  • Investment is projected to shrink again this year in more than a quarter of economies – primarily in Sub-Saharan Africa (SSA), where investment gaps were already large prior to the pandemic.
  • Growth in Sub-Saharan Africa is expected to rebound only moderately to 2.7% in 2021 – 0.4% point weaker than previously projected, before firming to 3.3% in 2022.

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