By Yinka Odumakin

Better to remain silent and be thought a fool than to speak out and remove all doubt.
– Abraham Lincoln .

FOR those who have been nursing hope that our country would get out of recession when government rolls out plans to combat the scourge,this may just be the time to get their sackcloth if the retreat that took place in Abuja last week is all that was in the offing.

By the way, recession is a period of general economic decline, defined usually as a contraction in the GDP for six months (two consecutive quarters) or longer. Marked by high unemployment, stagnant wages, and fall in retail sales, a recession generally does not last longer than one year and is much milder than a depression.

Our recession period has been marked by untold hardship marked by reported suicides across the country and a general state of hopelessness for the vast majority of our people.We have not seen any coherent plan from government to address the situation until last week when it held a one-day retreat at the State House conference centre in Abuja.

A statement from the Ministry of Budget and Planning said: “The retreat is expected to deliver improved understanding of the measures being taken to get the country out of recession; improve synergy among the various ministries for enhanced implementation of planning and budget and enhance knowledge of how to develop 2017 Budget to effectively link with the medium term plan.”

Gathered at the meeting were members of the Federal Executive Council,permanent secretaries and other motley crowd in government, four key speakers including Obadiah Mailafia, Ayo Teriba, Birsmark Rewane and Bode Agusto making presentations.
If the retreat had been just in on the 2017 budget,this column would have no beef with it. But to double as our recession committee is a sign that leadership is as lost as those committing suicide on where we are and what we should be doing to get out.

To those who don’t understand what just happened, it is like an hospital that has failed to cure a patient over a long period of time setting up a committee made up of doctors and nurses in the same facility sprinkled with some chemists in the neighbourhood to deal with the illness. If the sick man has relatives who are not sick upstairs they should discharge him quickly.

If leadership knows what is wrong with us,this is the time to have a strong economic team that works round the clock to tackle the situation we are in. There is no such team in place at the moment. We ought to have seen fiscal stimulus measures put in place. Here, I agree with Olisa Agbakoba (SAN) that it makes no sense to lock N3.5trillion in TSA while the economy is collapsing and commercial banks are dying. I accept that the Federal Government could have been scandalised that it was buying treasury bills from its own money kept with commercial banks but you can’t withdraw such funds overnight without doing substantial harm to the economy. In any case those banks are locally owned and those who work in them are Nigerians. You spend your way out of recession and not lock money up.

While saving is held up as something good for individuals but macro economists are of the view that saving on national scale could be negative and hurt the marginal propensity to consume (MPC). It is called the paradox of thrift.

We should have seen reduction in taxes. The immediate effects of a tax cut are a decrease in the real income of the government and an increase in the real income of those whose tax rate has been lowered. Due to the perceived benefit in growing real incomes among tax payers, politicians do claim their proposed tax credits as tax cuts.

Capitalism was inherently unstable, Keynes argued, and would rarely provide full employment. Therefore government intervention was needed, especially in recessions, to spend massive amounts of money on public works, which would create new jobs, expand demand, and rebuild consumer confidence. The Federal Government is not doing that at the moment . In the first full year of the administration not one kilometre of road was done throughout the country. If government planners could manage aggregate demand through public works, the boom-bust business cycle could be flattened and economic development could be managed in the national interest .

If the current lackadaisical attitude to our recession continues, Nigerians should brace up for a depression which is an unusual and extreme form of recession. Depressions are characterised by their length, by abnormally large increases in unemployment, falls in the availability of credit (often due to some form of banking or financial crisis), shrinking output as buyers dry up and suppliers cut back on production and investment, large number of bankruptcies including sovereign debt defaults, significantly reduced amounts of trade and commerce (especially international trade), as well as highly volatile relative currency value fluctuations (often due to currency devaluations). Price deflation, financial crises and bank failures are also common elements of a depression that do not normally occur during a recession.

The urgency of now is therefore a roll-up of sleeves by leadership with a sound economic team put in place to run a real economy as against the pedestrian and lack-luster performance currently on display so we can arrest the current decline.
Ultimately, the way out of the Nigerian crisis is restructuring but it is said in Yoruba country that while the well-fried dog meat is the ultimate delicacy, the mouth should not be on strike while the fireplace is hosting a barbecue session.

…No to Local Government autonomy
At a time when there is widespread clamour for restoration of proper federal structure in Nigeria came a rude shock that President Muhammadu Buhari is encouraging the trade union the military dictatorship encouraged chairmen of Local Governments to form to present a bill to further destroy the last vestiges of our federalism.

The president while receiving Association of Local Governments of Nigeria, ALGON, in the villa last week encouraged them to initiate a bill to seek autonomy from their states. He said: “The relationship between the three tiers of government is not a very nice one, especially that between the local governments and the states.
“The states feel like they own the local government, if they are of the same party. It is worse if they are not.
“This is a very serious constitutional problem and unless there is absolute clarity and transparency, the relationship will continue to be exploited against the interest of the ordinary people of the country.”

I recall that ALGON and the National Union of Local Government Employees, NULGE, stormed the 2014 National Conference to press for the so-called autonomy. I sat on the committee that had to deal with that matter and we resolved on the side of federalism .
In federalism ,there are two tiers of government -the Federal and the federating units.We therefore resolved that Local Governments should rightly be an an issue for the states who should determine their number,operations and funding.

And to address the fears of the stranglehold on them by the states,we recommend that there should be a revenue allocation body to manage the sharing of resources between the states and the Local Governments, LGs, within them and they must be democratically elected. We equally asked that the present anomaly of LGs being listed in the 1999 constitution should be rectified.The recommendations were accepted by the conference which I quote:.

4. Local Government administration
Conference recognised Local Governments as a layer of governance closest to the people and, in effect, a platform for sustainable socio-economic development and popular participation in governance at the grass-root.
It however noted the alleged abuse of the Local Government system by State administrations.
In tandem with its recommendation under Federalism, Conference introduced some necessary safeguards to guarantee the independence of local government councils.

Conference therefore decided that:

(a) Section 7 of the 1999 Constitution (as amended), that a system of Local Governments by democratically elected Local Government Council be guaranteed;
(b) States wishing to create Local Governments, may create them under the jurisdiction of the States;
(c) The number, structure, form and administration of Local Governments shall be determined by the States;(d) Without prejudice to the existing Local Governments, States that wish to, may create or reduce the number of existing Local Governments Areas, which shall be under the jurisdiction of the State;
(e) The List of the Local Governments Areas contained in the First Schedule of the 1999 Constitution (as amended) be removed, and transferred to the States to be covered by a law of the State Houses of Assembly;
(f) The functions of the Local Governments as contained in Schedule 4 of the 1999 Constitution (as amended) shall be transferred to the States subject to the power of the State Houses of Assembly to add or reduce the said functions of the Local Government;
(g) Chairmen and Councillors of Local Governments, not democratically elected, shall not be recognised by all authorities and persons and shall not be entitled to any revenue allocation;
(h) In addition to the functions conferred upon Local Government Councils as specified in the Fourth Schedule of the 1999 Constitution (as amended), a House of Assembly of a State may by law confer other functions on the Local Government;”

Final Conference Report Page 281

To make LGs autonomous is to create another 774 “states” to be reporting directly to Abuja and further weaken the states as federating units.It would also make irreversible their lopsided creation. The Federal Government that is sitting on the destiny of the federating units cannot in any way pose as the liberator of the LGAs without showing itself to be pursuing some sinister agenda against federalism in Nigeria. Why is it asking for LGAs what it would not grant the federating units in the country?
All lovers of federalism in our country must reject this quest!