The inauguration of a tripartite Economic Advisory Committee (EAC) by President Bola Tinubu, as part of his administration’s efforts to stabilise the economy, is timely.
The committee is made up of Vice President Kassim Shettima, Minister of Finance and Coordinating Minister for the economy, Wale Edun, Governors Charles Soludo of Anambra State, Dapo Abiodun of Ogun State, Aliko Dangote, Abdulsamad Rabiu, Tony Elumelu and Bismarck Rewane.
Coming at a time of the nation’s seeming worst economic crisis, the committee will proffer solutions that will rejig the economy. However, the government must implement the committee’s recommendations. It should not be like the report of the EAC set up by Muhammadu Buhari’s government in 2019, which was largely ignored. The present EAC is the outcome of a stakeholders meeting with the President at the State House, Abuja. At that meeting, President Tinubu admitted that his administration “does not have all the answers to the economic challenges.” The committee is charged, among other things, to come up with policy framework that will help assess in-depth the economic policy and recommend far-reaching measures that will revive the ailing economy.
Beyond that, the committee will critically look at the current food insecurity and unemployment situation and proffer concrete solutions that will boost food security and job creation. As experts in their various fields, members of the committee should come up with pragmatic measures to revamp the economy. Nigerians expect much from them. The President expects no less from them. He believes that the committee will live up to expectation. Therefore, let the committee hit the ground running. There is no time to waste.
With rising cost of living, the economy may collapse if nothing is done now to revive it. The naira is fast depreciating. As of last week, the naira exchanged for almost N1,900/$1. Food inflation for the month of January stood at 35.4 per cent, pushing prices of essential food items so high, the Gross Domestic Product (GDP) has dipped to 2.94 per cent, unemployment has reached all-time high, while the debt profile is over N90 trillion. These challenges, including foreign exchange scarcity, insecurity, and the present suffocating operating business environment must be equally addressed.
This is not the time to play politics, it is time to walk the talk, and address squarely the critical factors that hamper the economy. Nine months of Tinubu’s administration has not provided a clear economic blueprint towards charting a new course for the economy. It is, however, not too late to design economic measures, short, medium and long-terms, that can ramp up growth. We believe that a lot of options are open to the committee. One of such options is to reverse some of the fiscal and monetary policies that have not proven to be the solutions to the present economic hardship. The committee can review the removal of fuel subsidy and the unification of the exchange rates. The two policies were hastily introduced and poorly executed.
To stimulate the kind of economic recovery that the country needs now, will require, among other things, far-reaching policy reforms and the jettisoning of reforms that have badly affected the economy. The committee should recommend measures that will increase the production sector and encourage investment. For example, the recent monetary policy rate of 22.5 per cent, and the Cash Reserve Ratio (CRR) of 45 per cent, released last week by the CBN, should be reviewed downwards. If not reduced, they will worsen the present economic situation of many households and cause more job losses, especially in the manufacturing and other sectors of the economy, and adversely affect those who rely on bank loans for their funding needs.
Generally, tightening liquidity in the financial system will not improve the productivity base and exports. This is one of the causes of the current food inflation. While we agree that the present economic situation may not be fixed so quickly, this time requires creative leadership. This is what Nigerians expect from the government and its policymakers instead of the present blame-game. The committee should, therefore, lay the framework that will salvage the economy. In all, we enjoin the government to implement the committee’s report.