NAN-H-121
Recession
By Akeem Abas
Ibadan, Dec. 14, 2016 (NAN) Some economic experts in the country say resurgence of Small and Medium Scale Enterprises (SMEs) is imperative if Nigeria is to recover from the current recession and achieve growth.
They made the submission at the 2016 Business Leaders’ Conference organised by EZ37 Solutions and held at Kakanfo Inn Conference Centre, Ibadan.
The News Agency of Nigeria(NAN) reports that the theme of the conference was “Prospering in a Recession.”
Prof. Funmi Soetan of the Department of Economics, Obafemi Awolowo University, Ile-Ife, said that the nation’s economy was currently facing recession.
She said SMEs remained the engine room of the economy.
Soetan in her lecture entitled, “Practical Strategies for Getting out of Recession, ” said that the main cause of the recession was the fall in crude oil prices resulting from a glut in global crude oil supply and mismanagement of government revenue.
She stressed that the resurgence of SMEs would guarantee economic recovery and sustained growth.
Also speaking, Dr Femi Ogundele, a Senior Research Fellow in Economic Policy Research Department, Nigerian Institute of Social and Economic Research (NISER), Ibadan, said recession was a global phenomenon.
Ogundele said that the speed at which a nation in recession would pull out depended on the types of strategies adopted.
“The strategies and approaches will also depend on the state of economy.
“ Literatures have shown that no single omnibus strategy is capable of producing what can be regarded as the most efficient outcome,” he said.
He said that the combination of financial stimulus with other fiscal and monetary policies had been found to produce rapid response from economic downturn.
“Without major cash reserves and large capital asset as collateral and with more difficulty securing additional financing in trying economic times, smaller businesses may find it harder to survive recession.
“Bankruptcies among smaller businesses may therefore occur at a higher rate than among larger firms,” he said.
He said that some measures taken by individual countries depended on the nature and depth of the economic downturn
Ogundele also said the strategies included measures such as tax cut, transfers to government, financial bailout for ailing businesses, provision for expansionary government spending and economic diversification.
Other strategies, he said, included: “Protecting the naira and striving to maintain a dollar to naira exchange rate of less than N200 to the dollar as a means of controlling inflation.
“Promoting import substitution to reduce inflationary and devaluation pressures on the naira
and diversification of the economy to promote exports and grow jobs.
“Increasing capital investment in the economy through the fiscal budgetary process to drive growth were government prolonged strategic plan.”
Earlier, Mrs Adaora Ayoade, the Managing Director/Chief Executive Officer, EZ37 Solutions, said the forum was to proffer solutions to the current socio-economic challenges.
Ayoade said it was important for business leaders to come together to rub minds.
“This is with the aim of developing practical strategies to help our organisations and businesses navigate the recessionary tide and remain on the path to prosperity.
“There are many reasons why we find ourselves where we are today.
“ There is falling oil revenue due to drop in oil prices and incessant attacks on oil facilities which translated to scarcity of foreign exchange.
” There is Low Foreign Direct Investment due to investor’s jitters and lack of confidence in the economy and security in the country,” she said.
She said that the effect of recession on the business community had been challenging, adding that there was need to engage the situation in an informed, constructive and pragmatic manner.
NAN reports that Mr Oghenevwoke Ighure, Executive Director, Digital Services, BusinessDay, spoke on the use of digital media to stay ahead of competition.
Dr Mudashiru Olaitan, Director, Development Finance Department, Central Bank of Nigeria(CBN), also spoke on development finance initiative.
Also on the panel were Mr Pacqueens Irabor, State Officer, Bank of Industry, Oyo State, and Mr Biyi Oloko, the Special Adviser to Oyo Governor on Budget and Planning.(NAN)
TAA/OJO
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(Edited by Mufutau Ojo)