THE global coronavirus pandemic, otherwise known as COVID-19, has slammed severe economic devastation in all the countries of the world. Nigeria which has only recently recovered from recession has no option than to gird its loins to reset the economy.
The critical factor in the resetting of the economy for a sustainable growth and development is a total diversification of the entire economic activities which incidentally has as an integral constituent, the restructuring of the Nigerian federation. The two are like seismic twins since it was like that in the running of the federal system of government in the first republic between 1960 and 1966, when the country’s democratic system of government was truncated by the military interregnum.
There is no gainsaying the fact that if the economic diversification with its integral “competitive federalism” inherent in true federal practice in the first republic was sustained during the military government’s era, Nigeria’s economy would have been comparable to countries like Singapore, Malaysia, and some Asian tigers who were on the same economic development status in the 1960s.
It has been a sad commentary that the discovery of oil and gas in commercial quantity led to the neglect of agriculture which was the economic mainstay and sustenance with quantum export earnings for budget provisions in the first republic. The goring implication of Nigeria’s resort to mono-economy whereby crude oil sales forms over 90 per cent of export earnings is its being subjected to vulnerable and shocks in the global economy.
Thus the world economic lockdown consequent upon the ravages of COVID-19 has triggered drastic plummeting of crude oil price in the international markets. The 2020 budget of the federal government which was pegged at the crude oil sales benchmark of 57 dollars and oil production of 2.18 million barrels per day with the exchange rate of N305 per dollar had led to a revision of the budget.
The significantly reduced foreign exchange earnings from the sale of crude oil even as other exports have insignificant earnings, has compelled the federal government to resort to foreign loans to be able to execute the budget which will impact tremendously on the well being of the people. Some of the foreign loans from multi-lateral financial institutions include the International Monetary Fund, World Bank, African Development Bank and Islamic Development Bank.
Indications show that it might take a long time for the world economy to reinvent itself because of the unquantifiable consequences of the COVID-19.The National Bureau of Statistics had alerted the nation on the persistent low economic growth rate and the probability of the economy sliding back into recession. It stands to reason that if the entire economic activities is not fully diversified in line with the first republic federal system of government [aka true federalism which goes with competitive federalism] whereby the six geo-political zones taken as the new federating units will explore and exploit the natural and mineral resources within their domain, the dire prediction of the National Bureau of Statistics will come to pass.
When this realistic options are considered, the federating units will take due cognisance of their respective climate and environmental factors and create requisite environment especially maximum security which will jumpstart Foreign Direct Investment (FDI). This will be complemented with strategic infrastructural development and massive rural development to encourage agro-allied manufacturing and value chains for exports to boost foreign exchange earnings.
The federating unit governments will be in the vantage position to articulate areas of productive sectors like small scale manufactures and agro-allied industries for financial assistance to create massive employment to assuage the mounting social menace.