Former vice-presidential candidate Peter Obi has given out what can be described as a pathway to economic recovery.
Mr Obi, who spoke on Arise TV on Monday, agreed that the recent recession which affected about 40 countries around the world was as a result of the COVID-19 pandemic.
He however warned that the recession would bite harder on Nigeria because the country already had ‘underlying economic conditions’ ranging from extreme poverty to high unemployment rate, high number of out-of-school children, highest infant mortality rate and soaring incidences, drug abuse, among others.
Obi explained that unlike the previous recession where Nigeria recklessly borrowed its way out, this present recession demands fiscal discipline for the country to scale through.
He argued that the COVID-19 fiscal stimulus of about $5 billion provided by the Federal Government to recover the economy, was too low.
Comparing Nigeria with nations like India, Obi said they were spending around $300 billion to help them exit the recession, out of which $50 billion is for supporting small businesses. He further said that what was more worrisome, was the fact that even the little fiscal stimulus provided in Nigeria, was not getting to the right people and are not well accounted for too.
“When government supports and empowers small businesses, there will be greater productivity which will reduce unemployment, generate more revenues for the government and increase development in the country. China, for example, finances most of their budgets with taxes from small businesses, because they have a strong MSME sector that contributes greatly to their economy,” he explained.
Obi also suggested a private sector driven economy that would lift many financial burdens from the government.