- 80 per cent of our borrowings go back to lenders’ economies, says Labour
- Spending our borrowings on agric would have produced positive results – NLC
- ‘Productivity more than giving people N5,000 to buy second-hand clothes’
The organised labour has assessed Nigeria’s present economic situation, saying the Federal Government’s social intervention programmes and misapplication of foreign loans deepened the country’s recession.
The Secretary-General, Nigeria Labour Congress, Emmanuel Ugboaja, who stated this in an interview with our correspondent on Wednesday, said misuse of foreign loans, insecurity and the cash giveaways in the form of TraderMoni, MarketMoni and other cash-sharing programmes by the Federal Government worsened the recession in the country.
He also lashed out at the Federal Government, saying it had not been consulting workers despite making mistakes repeatedly.
Recall that the country on Saturday entered its second recession in five years under the Muhammadu Buhari regime as official figures showed that the economy shrank again in the third quarter of this year.
The latest recession is the worst in 36 years as data obtained from the World Bank indicated that the country’s Gross Domestic Product dropped by 10.92 per cent in 1983 and 1.2 per cent in 1984.
According to the National Bureau of Statistics, in its report for third quarter of 2020, the GDP, the broadest measure of economic prosperity, fell by 3.62 per cent in the three months up till September.
Speaking on the recession, Ugboaja faulted the misuse of foreign loans, which a few months ago pitted the executive against the National Assembly.
The House of Representatives Committee on Loans, Treaties and Protocols, had in August while probing foreign loans taken by the Federal Government, specifically faulted Chinese loans.
Criticising the usage of foreign loans, the NLC secretary said it was bad economics to allow a huge chunk of foreign loans to be repatriated back to the lender through the purchase of expensive equipment and expertise.
He said the government needed to explore creative options, noting that expending the loans on agriculture would engage more youths in productive ventures and also result in significant yields in the economy.
The NLC secretary noted, “We have been going about managing our economy wrongly. That is the truth. We have tended to act as if we are an industrialised country when we are not. We have a huge population, we should encourage and do things that take into cognizance our youthful strength.
“Why must our construction be driven by external equipment we don’t produce when we could have achieved same using manual labour; direct labour kind of performance rather than use a machine costing N15bn to apply the same to 50,000 youths?
80 per cent of our borrowings go back to lenders – NLC
“Our people need to get more creative in terms of options, where we put our money. We borrow and 80 per cent of that still go back to the economy of the lender in terms of equipment and expertise. If all the borrowings we had done had been towards agriculture, it would have made more sense. We have youthful population but we are paying trillions in subsidy. Ask yourself, who is collecting it?”
N5,000 cash giveaway by FG, a misadventure, not a productive way to spend money — NLC secretary
Ugboaja dismissed the cash giveaways by the Federal Government as a misadventure, arguing that giving out N5,000 was not a productive way to spend money.
He said, “If we used N3trn to do roads and rail construction through direct labour in Nigeria, we would not be talking about recession. But now, what politicians are doing is giving people N5,000, That’s not the way to go.
“Let people be productive; It cannot be about TraderMoni or MarketMoni. It must be about people being paid for being productive. The government intervention programmes cannot get us out of this problem. They are parts of what got us deeper into this recession.”
“What we need to do is get people to be productive. It is not about giving them money to buy second-hand clothes to sell. That cannot be the way to spend the money you have been giving the people,” Ugboaja stated.
The NLC secretary further observed that insecurity had made people to abandon their farms, describing this as a challenge to the economy, adding that this had also made people resort to self-help to survive.
He added, “If people can’t safely go to their farms, there would be a challenge in food production. If people can’t safely get out what they have cultivated, there would be a challenge in the economy.
“Livestock farmers cannot get feed for their animals because they cannot get to the farm to get the maize needed to make the feed, it would be a challenge to the economy and once that challenge is there, people are going to resort to self-help to survive and that is what is encouraging the insecurity the more; so it’s a vicious circle.”
He said, “We have a set of people that feel that it is beneath their status or it brings down their status if they have to consult workers in the country and we are supposed to be in a participatory democracy.
“The people (in government) feel it is incumbent on them to make sure that nobody adds a word to what they want to do. It is not a monarchy. They keep making mistakes and they apologise profusely when we want to apply the big hammer in form of strikes or street protests. It’s frustrating.”
The Debt Management Office had on June 30, 2020 stated in naira terms, the total public debt stock, which comprises the debt stock of the Federal Government, the 36 state governments and the Federal Capital Territory stood at N31.009trn.
The corresponding figure for March 31, 2020 was N28.628tn or USD79.303bn.
The increase in the debt stock by N2.381tn or USD6.593bn was accounted for by the USD3.36 Billion Budget Support Loan from the International Monetary Fund, New Domestic Borrowing to finance the Revised 2020 Appropriation Act.