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By Babs Iwalewa
World economies are not immune from sudden “boom” and “burst” cycles. These cycles of “boom” and “burst” have become a regular feature of the world economic system since the capitalist economic model accentuated by globalization gained ascendancy over other types of economic models within the last three decades. The “burst” cycle in an economy is what has come to be referred to as economic recession. An economic recession is basically a general downturn in any economy.
A recession is associated with high unemployment, slowing Gross Domestic Product GDP and high inflation. Experts opine that a recession is generally a period of negative growth in the economy for more than two quarters consecutively. The tell-tale signs of recession have been conspicuous within the Nigerian economic firmament since 2014, and finally reached a crescendo immediately this administration took over power.
The cause(s) of Nigeria’s economic recession are many but one major cause which has a consensus agreement amongst most informed minds is the collapse of global oil prices, which had over the years become Nigeria’s major foreign exchange earner. This was made worse by the absence of any buffer or savings as most of the savings and surpluses earned from oil receipts in the years of boom were frittered away. Hence a major challenge which this incumbent administration faced at its inception till now is how to arrest this drift and also ensure that the economy bounces back. This administration seem to have done quite a lot in this regard as its policy thrust has been in the direction of restructuring the economy from an oil dependent one to a diversified one, which is a laudable policy in the long run.
However, this mini treatise attempts to wager in on the debate of how to rejuvenate the economy and bring about a positive growth rate from the “Low hanging fruits” perspective. This perspective or paradigm is one which attempts to look at the short run and immediate Plans of Action (POA) that can revive the economy.
One of such is through investment in public works. For the economy to be rejuvenated, government should as a matter of urgency invests massively in public works through direct labor by citizens who are available and ready to work. Public works in this case refers to construction of inner city roads, culverts and drainages amongst several others all over Nigeria. The idea shall be to develop or fabricate low cost materials such as interlocking tiles for the fixing or construction of these inner city roads, culverts and drainages and getting young school leavers to produce these low cost materials since the technology or expertise needed to produce them is not high neither too expensive. In addition these young school leavers shall be made to take active part in the construction and fixing these tiles on the roads. When this is done, it will incentivize a lot of associated sectors leading to increase in the flow of money in circulation which will consequently stimulate aggregate demand. The way it works is this, thousands of young school leavers will be paid wages making them have disposable income to spend thereby pushing up demand and reflating the economy through productive activities. The other side of the coin is that materials such as cement, sand, gravel, moulds which shall be needed for the project shall be in high demand, forcing manufacturers to open closed factories or those operating below capacity to pick up again thus creating employment again through productive activities.
Another component of the “Low hanging fruit” paradigm is that government at all levels can mandate all public primary and secondary schools to adopt local fabrics such as Ankara, adire, sheda and so on as school uniforms. If this is done and enforced via the necessary statutes the multiplier effect is going to be massive. This is because players in the sector are going to witness a boom and increased economic activities as these fabrics are produced in Nigeria, also tailors who will turn the fabrics into garments of school uniforms shall witness a boom thus inducing an increase in demand and also promoting the acquisition and transfer of new skills. This strategy can also be adopted for foot wears for school children. Government can commission large scale production of school foot wears from locally sourced materials from locally sourced materials produced by local cobblers. This too, shall trigger a flurry of economic activities thereby increasing the aggregate demand which shall be consequent upon the increase in productive activities.
By and large, the policy thrust of restructuring the economy from a monocultural one which is very vulnerable to international oil price volatility and shocks to a more diversified and self-reliant one by the present administration is commendable, but it is at best a futuristic objective. The short run or short term quick fixes which the “low hanging fruit” paradigm espouses should also be considered.
Babs Iwalewa is a self-motivated writer, essayist and public affairs analyst. He tweets via @babsiwalewa.