Nigerians Call For Restructuring As COVID-19 Batters Economy

Nigerians Call For Restructuring As COVID-19 Batters Economy

By Wires Editor | The Trent on April 25, 2020
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FILE: A busy Nigerian market in Lagos Island, Lagos | Getty Images

Some Nigerians on Friday, April 24, 2020, intensified calls for the political and economic restructuring of the country, citing the devastating financial impact of the COVID-19 lockdown and a loss of oil earnings due to the global crash in oil prices.

John Nwodo, the president-general of Ohanaeze Ndigbo told The Guardian that the country could have escaped the looming economic downturn had its leadership listened to calls for restructuring and economic diversification.

He maintains that the solution lies in a restructured Nigeria that recognizes the contributions of various segments of the country, rather than running an economy that relies primarily on oil revenues.

Mr. Nwodu opines that the whole essence of restructuring is to look for alternatives, given Nigeria’s vast resources that remain untapped. However, the North feels that the South clamors for restructuring because it does not want them to partake in oil revenues.

Secretary-General of the Yoruba Council of Elders, YCE, Kunle Olajide regretted he had been “hearing of diversification in Nigeria for over 20 years but no active step has been taken in that direction because political leaders have depended heavily on crude oil.”

Mr. Olajide calls for the gradual shift away from federal revenue allocation, stressing that there was nothing like a federal revenue allocation in the first republic. In the First Republic, it was the federating units exploiting their resources and paying a royalty to the federal government.

There was no federal allocation for the regions that would necessitate going to Lagos (the then federal capital) to collect money based on a specific percentage. At a stage, it was 50/50. In other words, the regions had 50 percent and 50 percent to be shared. The 50 percent was divided into two — 20 percent to the federal government and 30 percent to be shared among the regions.”

Olajide added: “As a starting point before you can get any meaningful economic diversification, there must be geopolitical restructuring. This geopolitical restructuring must ensure that the powers you have, now, are restored to the states. We have been living a lie. We have got to the critical stage now, the crossroads, where an important decision must be taken,”

There is no “better time but now to commence restructuring of the country,” said President of the Middle Belt Forum, MBF, Pogu Bitrus. He noted that by this alone could Nigeria emerge stronger prom the pandemic.

Ayo Adebanjo, a chieftain of Yoruba socio-cultural organization, Afenifere, shared this view. According to him, the pandemic has exposed the weaknesses of Nigeria’s governing structure and the inefficiencies of its elected leaders. “The better time to restructure Nigeria is now. Any time wasted further would plunge the nation into chaos,” he warned.

Tony Uranta, the executive secretary, Nigerian National Summit Group, NNSG, said: “For Nigeria to survive as a sustainably peaceful union premised on justice, equity and fair play, she must be urgently reconfigured to allow resource centers benefit first from their own resources.”

Justifying his submission, he said: “Nigerians witnessed, with unbelieving shock, how stimulus packages were shared out primarily to the Northern states, using money generated mainly from Southern states, without any going to the states where the majority of the said funds were generated.”

Putting the fall in oil prices into perspective, Adeola Adenikinju said the current situation is an opportunity for oil firms to drastically cut down costs and drive up productivity.

The director, Centre for Petroleum and Energy Economics, University of Ibadan, said: “I am aware that most oil companies are negotiating with their suppliers and contractors to reduce costs by as much as 50 percent. They have to look at their entire value chain and see where savings can be made. It is not a time for bloated costs. Emphasis must be on how to aggressively drive down costs and boost productivity.”

He noted further that there is no need for oil producers in the country to embark on new capital investments or projects but rather consolidate on existing ones.

Also, former President of Nigerian Association for Energy Economists, NAEE, Wumi Iledare noted that in the short-run oil price might continue to fall until it begins to rise when inventory is depleted or nearly so.

The country is “in for our worst recession in history. Unfortunately, we are not ready to confront it or we lack the capability to confront it,” warned Dino Melaye, a member of the Eighth Senate.

According to him, “The situation would be outrageously calamitous. We have not saved for the rainy day. We have no economic and political prowess to tackle the political and economic tsunami that is looming.”

Unlike other analysts, however, Melaye proffered a divine cure. “The solution is for the president and other leaders to do restitution to God. He (President Buhari) should declare a national day of prayer and call on the mercy of God because the negatives, ineptitude, mal-administration in this government are beyond amelioration. And when you find yourself in a catastrophe, the only solution is God.”

On his part, a business mogul and Calabar-based philanthropist, Ben Akak, said: “It is very important, at this point, that we begin to think of restructuring our political-economic strategy, given the collapse in oil prices as a result of coronavirus.

“We cannot use the same system and expect the same result. It is important we restructure our economic policies and economic data. I believe that while maintaining the federating units and possibly strengthening them, there must be an element of decentralisation of the economy so that the states could begin to be very active.”

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