THE health of our 2019 economy looks fragile, like one convalescing from a protracted health challenge. Though we exited recession over a year ago, all macroeconomic performance indicators are still either in the negative or in sluggish recovery. But what are the key challenges as we brace up for 2019?
The foremost has been revenue performance where fiscal policy execution has been hamstrung by weak cash flow. This is not just a 2018 problem; it has been with the economy for long. The implication has always been a poor public sector performance.
In an economy that is perversely and perennially public sector-driven it becomes more obvious as to why the economy cannot do well.
Linked to this is the mono-cultural economic structure where the public sector revenue and almost over 70 per cent of the economy run on the upstream oil industry.
With its linkage to the entire economy in terms of job creation and industrialisation, the weaknesses of the economy are further buttressed. The outlook for 2019 is rather grave, with the steady decline in oil price which has already made a mess of 2019 appropriation bill even before its enactment by the National Assembly.
Also, the fiscal policy execution has been tangentially weakened by poor budgetary politics and strategy.
A situation where an annual budget was hardly available for implementation until the middle of every year in the past three years and beyond has not helped the economy.
Consequently, capital budget implementation, the key driver of growth, has ranged from 35 to 45 per cent.
In terms of budget implementation, the fiscal authorities have insisted that irrespective of the delays the process still runs its twelve-month cycle, spilling into the subsequent year.
Based on this, we have seen a significant implementation level for the much desired capital expenditure. However, we call for the discipline of execution according to appropriation plan, as well as transparency in reporting the process and the results.
The Buhari regime has also made some efforts since the promulgation of its Economic Recovery and Growth Plan, ERGP, in 2017, to push harder at diversifying the economy through the remarkable support offered the agricultural and small/medium business sectors.
These efforts have only shown marginal impacts. In the face of declining oil price, diversification efforts need to be intensified and a new programme for the domestication of the oil industry should ensue.
We call on the Federal Government to commit strongly to its intention to insulate all economy-related agencies from partisan politics and focus them to policy implementations during the period of campaigns and elections. This policy should be continued long after a new government is sworn-in, in May 2019.
The economy is too fragile to be abandoned, even for one fleeting second.