Saturday, 20 August 2016

What causes the current Economic Hardship in Nigeria?

By Dr. Ahmed Adamu

President Muhammadu Buhari

He came home with no food and no money, and met his two children crying, they did not eat for the whole day, he perspired and collapsed as a result of frustration and anxiety. He died before reaching the hospital. That is how poverty can kill. Another person burst into tears for not receiving his monthly salary on time, he had to borrow money to transport himself to a town (where there is a Bank) expecting to receive his salary alert so that he can buy food to celebrate Sallah festival, but he was disappointed as government did not pay his salary yet. People around had to contribute money for his transport back home. This is how dependency on government salary can frustrate.

However, these could have been relatively avoided if people reduce too much dependence on government. Many people rely heavily on salary from government or single source of income. This has made many lazy and vulnerable to an income shock. It also added so much burden on government. Majority of young graduate finish school expecting to be employed by the government. The government is now unable to sustain the increasing burden of salary payments. The low crude oil price has significantly reduce the capacity of the government, and it is not surprising the government is trying to reduce the salary burden to the minimal level.

The implication of tightening the salary liability is that there might not be new employment in the short term and possibly some may have lower salary or delay in receipt. And because salary is the sole source of income to so many, the people’s economy is now in worst jeopardy. In addition, inflation has so far increased by 6% from last year, and yet salaries did not increase, which means people’s economy are getting weaker as their purchasing power has reduced by 6%.  Therefore, too much dependence on government salary or single source of income has caused the recent endemic poverty in the country.

The repercussion of so much dependence on government is manifesting due to the recent shock in government revenue. So, this should serve as a wake up call to everybody to diversify sources of income and engage in productive ventures. Doing this will relieve the government of so much responsibility and allowing it to provide social services. People find it easy to blame government for their poverty condition, they overlook their own share of blame for being so much dependent.

One of the major contributor to the endemic poverty is lack of social services, which has been inadequate, and people have to use their little income to provide those services for themselves. So, government must save to provide these services for all, so that individuals can be responsible for their own economies.

My advice to Nigerians is to engage in production, do not just buy and sell, make or produce something. This is what will add significant value to the economy and increase income taxes to government. By doing that, we would not need government job, rather we will create the job ourselves. Instead of employing new employees, government and private individuals should create entrepreneurship funds, which will be accessible to entrepreneurs especially makers or producers. The capital incentive should be a grant, not a loan, as interest payment/loan hinders access to capital.

President Buhari has been reported in many occasions pleading with Nigerians to be patient with the current economic hardship, and I think Mr President should not only ask for patience, he should use his goodwill to preach and advocate for Entrepreneurship among Nigerians. He should consistently ask or challenge Nigerians to embrace business and productions (Agriculture inclusive).  Entrepreneurs must be creative and engage in producing things we import like Cell Phone, Cars, Electronics, Fabrics, foods etc This will help reduce inflation and create more jobs.

We have so much innovation and strategies in raising money for our personal projects, like marriage, building houses, buying cars etc, we should channel similar strategy and energy in raising funds to fund our productive businesses. We can postpone such kind personal projects for later times. After our businesses prospered, we can then do those personal projects. Every young person shall have innovative idea and plan for creative production. We should stop wasting free times, we should use it to learn new business skills, ideas or source for capital. Young entrepreneurs with little capital should learn to engage in business partnerships. If we do that, we will be responsible for our own economy, then we would not expect from government, rather we help the government.

Finally, Women must equally step it to contribute to the growth of the economy, with almost half of the country’s population, women can make differences and help families. Working parents can adequately cater for their children and themselves, and support each other. Therefore, spouses should help each other to establish businesses.

Dr. Ahmed Adamu,
Petroleum Economist and Development Expert,
Pioneer Global Chairperson of Commonwealth  Youth Council,
University Lecturer (Economics), Umaru Musa Yar’adua University Katsina.


5 comments:

  1. Well said and well wri written
    The issue of thinking and innovation is important
    So far we have failed to use our brains

    ReplyDelete
  2. Well said and well wri written
    The issue of thinking and innovation is important
    So far we have failed to use our brains

    ReplyDelete