Economic Recession: Experts urge more spending

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 Economic and financial experts agreed that the economy had slid into a recession, stressing the need for massive government spending to revive it.

The Director-General, West African Institute for Financial and Economic Management, Prof. Akpan Ekpo, said, “The economy is in a recession. What we need now is a robust fiscal policy. Government has to spend – pour more money into the economy – not just on capital projects.”

He said salaries owed to workers by states should be paid so that people could have money to buy goods and services.

Ekpo added, “The recession is a special type. It has effects on both the supply and demand sides. So, the way to solve that is massive government capital and recurrent expenditure. Monetary policy will not be effective. The dilemma that they have is where to get the revenue. I am sure they are borrowing to finance the expenditure because oil revenue is not increasing at the rate they want.

“How fast they can begin to implement the fiscal policy is crucial. If government fails to act and the recession persists, and becomes a depression, then we are in a big mess. Now, we need massive fiscal stimulus into the economy, and we have to do that like yesterday.”

The Chief Executive Officer, Financial Derivatives Limited, Mr. Bismarck Rewane, said, “We are already in recession. All the time you have a deficit budget, you are borrowing; you are expanding activities. The way to be out of a recession is to spend your way out of it. So, that is what they are doing. They are doing all the things that need to be done.”

A former President of the Nigerian Economic Society, Prof. Akin Iwayemi, said to achieve recovery, the government must put in place the right policies and implement them fast.

“It doesn’t seem to me now that we are taking the right polices,” he said, stressing the need to tackle insecurity, energy crisis and militancy, and take concrete steps to diversify the economy away from oil.

The Head of Research and Investment Advisory, SCM Capital Limited, Mr. Sewa Wusu, said, “It is a conundrum. We have high inflation and recession. To counter recession, the Federal Government needs to spend money. However, the problem we have is that the money is not there.

“What we can do for now is to reduce importation and seek to boost local production.”

Analysts also advised Nigerians to brace for tougher times as the recession might last till at least the end of this year.

According to them, the obvious signs of recession are rising cost of living, declining purchasing power of the citizens, increasing job losses and general hardships, among others.


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