The Nigerian economy is now “technically” in a recession, according Ms Kemi Adesun, the Minister of Finance. By the end of July, recession was trending on google, in Nigeria. Millions of working people and youth want to better understand what this economic term means for us in real life. This is particularly so as we have been thrown into the abyss of despair already, before this further slump in the economy.
Quite a number of the rich, representing different sections of the ruling class have also been speaking about this matter. Mr Godwin Emefiele, Governor of the Central Bank of Nigeria painted a gloomy picture of the future, while in a closed session with the Senate. He pointed out that there is rising inflation and stagnation, which will make growth sluggish for sometime to come.
Ms Adeosun on her own part insist that we are in a “recession, yes (but), the worst is over”, claiming that the recession “would be a very short one” because of the policies being implemented by the government. She is not the only one with such optimism, amongst the bosses.
Gbenga Oluniyi, 1st vice president of the Institute of Strategic Management of Nigeria – a think tank for capitalists’ strategic interests- loudly says that “economic recession is good for Nigeria”. In his view, recessions make people to “think out of the box”. He added that “the institute is happy with what is happening now because we really have not been thinking. We have been lazy”.
Despite the seeming differences in opinions within the bosses’ class, the pessimism and optimism are two sides of the same coin. Recessions are inherent to capitalism because of the profit motive which drives production. There are thus cycles of boom and then bursts. Moments of economic downturns with the sufferings they bring for poor working class people could equally serve as opportunities for recovery and further profit-seeking.
There is however one very important point that the capitalist opportunities try to hide from us. The bosses recovery more often than not rests on making working class people bear the brunt of the crisis. This is essentially why we must start building a massive offensive to fightback now! We must not bear the burden of the maldevelopment which is natural to capitalist.
This brings us to a specific element in the illusions of Ms Adeosun and the Nigerian state. She correctly notes that Nigeria “is not the only country in recession” but, not surprisingly, fails to draw the correct conclusion from this – we are in a global crisis of capitalism like never before in almost a century. And it is not likely to end soon. Rather, she hinges her faith on the social intervention programmes currently being unfolded by the federal government. But, can this really turn around the economy, particularly for the benefit of the poor?
A recession technically speaking is when an economy has negative growth for two consecutive quarters of a year. The slide into recession of the economy was pointed out by two sources mid-July. First was the IMF in its latest issue of World Economic Outlook report. It pointed out that the earlier projection of 2.3% GDP growth for the country this year, could definitely not be achieved. It equally forecast a further slowdown from the expected growth of 3.5% to 1.1% for 2017.
Second was the National Bureau of Statistics (NBS) in its report for the first quarter of 2016. It shows that the growth rate for that quarter was 2.47% and 4.32% lower than what it was for the same quarter in 2014 and 2015, respectively. Interestingly though, the report shows that the sluggish growth cannot be placed at the doorsteps of a fall in revenue from oil as we are often made to believe.
The oil sector actually grew by 1.89%. And recently But, as Dr Yemi Kale, the NBS boss puts it, “in terms of jobs, the nation’s economy performed woefully”. He was referring here to the rising level of unemployment. But this is going on with the painful new normal of employed workers being owed several months of salaries in the public sector.
But this brings us back to the question: can the federal government’s social intervention policy bring the economy out of the mess it is now in? Or to put it in another way, can the bosses spend their way out of the recession by putting in the N500bn it has set aside for its interventionist programmes, as the CBN governor thinks?
The answer is NO, for several reasons. First, the same CBN governor has alerted us that the Federal Government might not be able to pay October salaries as at when due. While 27 out of the 36 states of the federation have been defaulting in paying public sector workers’ salaries, the federal government has appeared immune from the alleged insolvency of states in this regard. If it now has cause to fear that there might not be enough money available to pay salaries by October, how for goodness sake would it be able to back its much celebrated welfare programmes, questionable as they may be, with cash?
Second, even if somehow, these programmes could be executed to some extent, they represent just little drops in an ocean of economic crisis. Recessions are very critical manifestations of crisis in the capitalist system, structured into the way capitalism works. But an end to a recession does not in anyway amount to a solution of the problem or a stoppage of crises.
The present state of the Nigerian economy is not just about policies and programmes of the inept class of indigenous bosses. It is part and parcel of the waves of a long-drawn global economic depression, which is set to get only worse. The Great Depression of the 1930s was one such moment in history. At that time, because workers rose up in millions to fight, influenced by socialism as an alternative to capitalist development, the bosses’ class were forced to reach a class compromise, with the ideology of Keynesiansim.
John Maynard Keynes whom that capitalist approach was named after propounded the need for huge government spending and lower taxes to stimulate demand in a bid to pull out the economy from depression. Keynes was conscious that without the reformism he advanced, there could be great revolutionary upheavals. He said as much in some of his correspondence. It took the destruction of World War II to convince the capitalist class worldwide that it was a good idea to give working people some crumbs from the social wealth, so as to have peace.
But Keynesianism fell out of favour with the capitalists by the mid-70s because it failed in the long run. A combination of inflation and stagnation (called a state of stagflation) swept through capitalism as the rate of profit for the bosses’ nosedived. The neoliberal ideology of free markets and deregulation was then introduced as the new order of capitalism. Not even the Great Recession of 2007-2009 could convince the bosses to revert from their neoliberal agenda.
This has led many radical to see the problem as being neoliberalism. The default nature of capitalism of course is liberalisation. Converse to the idea that this means reduced state powers, it is done with and through the state (governments). The state is not a neutral set of institutions. It serves the interests of the bosses, safeguarding capitalism within and across borders. But the problem is capitalism.
Keynesianism as a global model, more or less, was possible at a specific moment in history. It was a reformist compromise reached in form by the capitalists because workers aspired for much more in content – socialist revolution. But, it is unlikely that the policy space for such an approach would be open for individual countries like Nigeria, t this moment of crisis. And most importantly, it cannot resolve the systemic crisis of capitalism.
We cannot hope for our salvation from any section of the bosses. Our emancipation from the sufferings and pauperisation which this exploitative system always generates and which will only get worse as we stagger through this recession into further economic depression, must be won by we, working class people, ourselves, through struggle.
We must resist any attempt by the bosses to make us bear the burden of economic recovery. Now, more than ever, there is a pressing need for an all out fight to demand the full payment of backlogs of salaries. We must fight now for the N56,000 minimum wage. We must demand social protection for working people as well as universal public health coverage and free education.
We must not allow the bosses to blackmail us with recession. We must demand that, elected public officials who presently feed fat on the social wealth be placed on the average wage of civil servants. A more progressive tax system must be introduced with the rich bosses paying much more to provide for social services for the poor.
We must however be quite clear that the bosses will not only put up a fight, they will do everything possible under capitalism, which is their system to make us remain nothing but waged and unwaged slaves. Our fightback must thus essentially be a counter-offensive against capitalism as a whole. To overthrow it and establish a working people’s government that would build a socialist society.
Capitalism is an international system. The crisis we are living through is one that sweeps all countries into its whirlwind. The struggle to overthrow it and build socialism thus is a global one. We can see a renewal of commitment to socialisyt ideas sweeping through the world as well. We must stand together and fight together with workers of all lands, to take the fightback beyond one for more crumbs from the tables of the bosses. For even these crumbs are unlikely to be thrown down to us if we beg on our knees.
Now is the time to reflect, to rethink and to act. Now is the time for a fightback against recession and indeed, to overthrow capitalism.