Former presidential candidate of the Young Democratic Party (YDP), Kingsley Moghalu, says the Nigerian economy will not grow as long as it is “based on 1999 constitution”.
Data from the Nigeria Bureau of Statistics (NBS) on Saturday showed that Nigeria had slipped into its worst economic recession in 33 years.
According to gross domestic product numbers released by the National Bureau of Statistics, Nigeria recorded a contraction of 3.62 percent in the third quarter of 2020, making it the second consecutive quarterly GDP decline since the recession of 2016.
Reacting in a statement on Sunday, Moghalu said the nation’s economic growth requires far-reaching actions in the political system.
He said the existing constitution has no incentive to create wealth and that the solution to bringing Nigeria out of the current problems is by restructuring the constitution to true federalism.
“It is no surprise that Nigeria has entered its second severe economic recession in five years since 2015. According to Dr. Yemi Kale, Chief Executive and Statistician-General of Nigeria’s National Bureau of Statistics, Q3 2020 Real GDP contracted for a second consecutive quarter by -3.62 per cent. Cumulative GDP for the first nine months of 2020 stood at -2.48 per cent. This decline was led by the oil sector, which contracted by 13.89 per cent in Q3, while the non-oil sector contracted by 2.51 per cent in the same period,” he said.
“Leading inclusive growth for economic transformation in Nigeria now requires far-reaching actions in the political realm. No amount of “defensive” approaches to economic management, akin to the labors of the mythical Sisyphus, can adequately reverse Nigeria’s worsening economic crisis and put the country on a path to real development if the underlying issues that have created our weak economic framework are not addressed.
“Chief among these structural factors is the urgent need for a constitutional restructuring of Nigeria to true federalism. Nigeria’s economy cannot make real progress as long as it is organized on the basis of the 1999 Constitution.
“The existing constitution contains no incentives to economic production that creates wealth, as it centralizes excessive power in the central government. On the contrary, it creates massive incentives for a “sharing” economy based on earnings from crude oil sales, which belong primarily to the Federal Government of Nigeria.
“This in turn creates an embedded incentive to rent-seeking as economic activity, an absence of deep reflection by the political leadership on the nuances of competing economic frameworks as a basis for economic policy, and the commodity dependence that has created frequent economic distress through externally induced oil price shocks. Our distress is now further entrenched with extreme levels of foreign borrowing that have essentially mortgaged the future of Nigeria’s youth.”
Moghalu said though the COVID-19 pandemic contributed to the recession, the nation’s economy had long been depressed before then.
“While the Covid-19 pandemic and associated lockdowns imposed in the early months of the pandemic contributed significantly to this recession, it is not a valid excuse to avoid confronting the more important causative factor of the longstanding, weak fundamentals of the Nigerian economy. Our economy was distressed long before Covid-19, as demonstrated by the recession of 2016-2017 and the fragile recovery,” he said.
“Moreover, the Nigerian government’s already-weak fiscal position left it unprepared and unable to support its citizens adequately during the Covid-19 pandemic.
“This fiscal and monetary-authority response was grossly inadequate to meet the magnitude of the challenge.”
He added that another way of pulling the economy out of recession is by voting into office competent leaders that “will identify and work with the best minds among our compatriots to create economic transformation.”