CONTEMPORARY trends in the nations economy require a robust and purposeful response from the Federal Government to stave off ruin and propel development. Nigerians and her global development partners are however dismayed that, rather than a coherent stimulus plan, the government has adopted, at best, tepid or disconnected palliatives that have failed to address the structural defects in the nations economy. Yet, urgent action is needed as revealed even in officially-generated statistics.In its latest report on the economy, the Nigerian Bureau of Statistics said real Gross Domestic Product grew at a lacklustre rate of 7.4 per cent in the third quarter of 2011, compared to 7.86 per cent in the corresponding period of 2010. Inflation rose to 10.5 per cent in October compared to 10.3 per cent in September. The figures become more alarming in the area of unemployment which the Statistician-General of the Federation, Yemi Kale, put at 23.9 per cent in October this year, up from 21.1 per cent in 2010 and 19.7 per cent in 2009. This translates to additional 1.8 million unemployed persons between December 2010 and June this year, made up of new entrants into the labour market (mostly graduates) and previously employed people who lost their jobs during the period.More worrisome, according to Kale, is that unemployment was highest among the youth aged 15-24 years (37.7 per cent) and 25-44 years (22.4 per cent); and was higher in the rural areas. The Ministry of Labour and Productivity says about 48 million Nigerians of working age are unemployed while the Central Bank of Nigeria says 41 per cent of the countrys university and polytechnic graduates are jobless. Domestic debt is also rising, hitting $5.32 billion in September this year, an increase of 25.77 per cent over the $4.23 billion recorded a year earlier, with Federal Government bonds accounting for $3.36 billion or 63.11 per cent, according to the Debt Management Office.The bleak picture shows no signs of brightening soon. Developments in the Foreign Exchange and Money markets are also discouraging. CBN has endorsed the further devaluation of the naira that will allow the national currency to float between N150 and N160 to one United States dollar, up from between N145 and N155 to $1. This signals the continued failure of monetary policies to firm up the naira, reduce interest rates and curtail inflation. Six times this year, the apex bank has raised its benchmark lending rateMonetary Policy Ratein a futile bid to control money supply and prevailing interest rates. Bank lending rates range from 20 per cent to as high as 28 per cent.These excessive rates cripple businesses, especially agriculture, mining and manufacturing (the productive sectors), which typically employ large numbers of people while lenders prefer to lend to traders and importers who employ very few. Further discouraging savings and investments, banks offer paltry interest rates on savings at between 0.01 per cent and 3 per cent. The often stated aims of achieving single-digit inflation and lending rates on the one hand, and double-digit GDP growth on the other, have failed. An optimistic prediction by the International Monetary Fund of 8.4 per cent GDP growth by December this year now looks shaky. In any case, Oby Ezekwesili, Director, Africa Region, at the World Bank, had warned that the 8.2 per cent growth recorded earlier this year did not represent qualitative improvement in infrastructure or living standards, but was driven largely by higher oil prices.In any job creation strategy, fixing of infrastructure deficit is key. But unchecked public corruption remains a major hindrance to fixing the nations decrepit infrastructure. Public treasury looting is said to cost the nation about 40 per cent of its oil wealth. The choices before the federal and state governments are straight-forward: aggressive war against official graft; drastic reduction in the excessive costs of governance; adoption of stimulus plans targeting improvements in infrastructure, job-creation, entrepreneurship and agriculture; and adoption of medium and long term development programmes and their scrupulous implementation.The onus falls especially on the Federal Government to emulate other countries where drastic spending cuts are being implemented alongside creative stimulus plans. President Barack Obamas stimulus plan added 600,000 jobs to the US economy in a three-month period earlier this year. Above all, the government should adopt five-year development plans, targeting, and integrating, all sectors in a holistic economic plan. Ghana, Botswana and once strife-torn Rwanda have adopted national plans that are transforming their economies.There is also the need to restructure the tax system that currently overburdens businesses and employees with excessive and multiple rates, levies and charges while allowing an overwhelming percentage of the population, including high net worth individuals, to pay little or nothing. The way forward is to allow the private sector free rein through a favourable operating environment and total privatisation of all publicly-owned commercial assets.Transportation bottlenecks should be tackled immediately. Priority should be given to massive (private) investment in railways, power, solid minerals and downstream oil sectors where inhibitive laws and government control have held down development for so long. The over-reliance on oil revenues must be broken though a diversification of the economy, while the social tensions and insecurity generated by massive unemployment should be reversed through massive job creation initiatives.
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