Restructuring: Nigeria Can't Make Economic Progress With 1999 Constitution – MoghaluRestructuring: Nigeria Can't Make Economic Progress With 1999 Constitution

Kingsley Moghalu, former presidential candidate of the Young Democratic Party (YDP), says the 1999 constitution is sabotaging the Nigerian economy from attaining its full growth and potential.

Ekohotblog had reported on Saturday that Nigeria had slipped into its worst economic recession in 33 years. after the economy contracted by 3.62 percent in the third quarter of 2020.

The development is sequel to to gross domestic product numbers released by the National Bureau of Statistics.

The development makes it the second consecutive quarterly GDP decline since the recession of 2016.

Reacting to the situation in a statement on Sunday, Moghalu said the slide into acute economic recession for the second time in five years didn’t come as a surprise.

He added that the nation’s economic growth requires holistic shakedown of the political arrangements, adding that the current constitution does not give incentives to economic productivity and ingenuity because it places too much power in the central government

He noted that the panacea to Nigeria’s economic woe is by restructuring the constitution to true federalism.

“It is no surprise that Nigeria has entered its second severe economic recession in five years since 2015. According to Dr. Yemi Kale, Chief Executive and Statistician-General of Nigeria’s National Bureau of Statistics, Q3 2020 Real GDP contracted for a second consecutive quarter by -3.62 per cent. Cumulative GDP for the first nine months of 2020 stood at -2.48 per cent. This decline was led by the oil sector, which contracted by 13.89 per cent in Q3, while the non-oil sector contracted by 2.51 per cent in the same period, “he said.

“Leading inclusive growth for economic transformation in Nigeria now requires far-reaching actions in the political realm. No amount of “defensive” approaches to economic management, akin to the labors of the mythical Sisyphus, can adequately reverse Nigeria’s worsening economic crisis and put the country on a path to real development if the underlying issues that have created our weak economic framework are not addressed.

“Chief among these structural factors is the urgent need for a constitutional restructuring of Nigeria to true federalism. Nigeria’s economy cannot make real progress as long as it is organized on the basis of the 1999 Constitution.

“The existing constitution contains no incentives to economic production that creates wealth, as it centralizes excessive power in the central government. On the contrary, it creates massive incentives for a “sharing” economy based on earnings from crude oil sales, which belong primarily to the Federal Government of Nigeria.

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“This in turn creates an embedded incentive to rent-seeking as economic activity, an absence of deep reflection by the political leadership on the nuances of competing economic frameworks as a basis for economic policy, and the commodity dependence that has created frequent economic distress through externally induced oil price shocks. Our distress is now further entrenched with extreme levels of foreign borrowing that have essentially mortgaged the future of Nigeria’s youth.”

Moghalu said though the COVID-19 pandemic might have played a role in the country’s slump into recession, the nation’s economy had long been depressed before then.

“While the Covid-19 pandemic and associated lockdowns imposed in the early months of the pandemic contributed significantly to this recession, it is not a valid excuse to avoid confronting the more important causative factor of the longstanding, weak fundamentals of the Nigerian economy. Our economy was distressed long before Covid-19, as demonstrated by the recession of 2016-2017 and the fragile recovery, “he said.

“Moreover, the Nigerian government’s already-weak fiscal position left it unprepared and unable to support its citizens adequately during the Covid-19 pandemic.