 With a blink of an eye 2011 is almost over. This year definitely went by way too fast, but I would not change what happened for anything. It was a very good year for me. I experienced so many new things.
Some might say to it’s well-deserved end, at least as far as the economic and financial matters are concerned.
As one colleague put it, “it’s been a crazy year and I only hope it’s soon over!”
Does 2011 deserve this bad reputation of annus horribilis? Yes and no.
Yes, since the global economic crisis still held sway for a greater part of the year and No, because the economic recovery has taken hold in Nigeria. It is progressing from export growth to domestic demand and, thus, becoming more sturdy and self-sustaining. Besides, the crisis has triggered a fundamental reform of Nigeria economic governance.
No doubt we have been dragging along, but we fared better than the previous year, I think. Not so bad as some would want to portray it.
Though we recorded so many crises due to militancy, armed banditry, kidnapping and the boko haram bombings. This year, but we made some significant progress all the same in the financial sector.
The crisis this year to me is a turning point for Nigeria, often a decisive one. It is a test that reveals structural and security weaknesses or lapses. In the absence of a decisive response, any crisis would be wasted and quickly end up in an even worse failure.
So, here we are at the end of 2011 with the apparent paradox of a recovery taking hold in the real economy while the financial markets, Nigerian stock market, continue being nervous and the national security continue to be under daily threat from Boko Haram.
Our citizens and the market forces are waiting for a turning point. Empty statements do not work. We (the government and the citizens) are expected to contain the financial and security forest-fires. Then, we are expected to fix the system.
When the global financial crisis really hit, there was a significant probability of a second Great Depression. It was avoided because, at that crucial moment, the policymakers particularly Sanusi been at the helm of affairs at CBN, succeeded in coordinating their efforts and deciding on robust fiscal and monetary stimulus to stop the economic free-fall, hence in the Banking sector for instance the hitherto strong Banks are now going into merger or being acquired out right in addition to the ones to that were taken over by the federal Government.
Decisive action was taken by Sanusi sometimes this year at the time when the extraordinary banking problems caused a huge burden on the public finances, which were already suffering from the recessionary impact.
If you ask me, much has been done to safeguard financial stability and build up our fiscal fire brigade.
But much more needs to be done to rebuild the economic architecture to pre-emptively tackle crisis tendencies and create solid foundations for sustainable growth and job creation come 2012.
Let us be honest: the global crisis hit Nigeria so hard because our fiscal houses were not in order. Despite the Stability and Growth Pact, public finances were vulnerable prior to the crisis and serious macroeconomic imbalances had developed over time.
This is why it is of paramount importance that Nigeria members of Parliament (Senate and House of Reps) need to debate the fundamental reform of our economic governance.
One crucial lesson from the economic crisis that held sway between 2010 and 2011 is that we must make preventive budgetary surveillance much more effective and biting than it has been so far. In future, we want to prevent crisis like what is happening in some European countries such as Greece, Italy, calling for financial bail out and heavily indebted.
Another lesson is that macroeconomic imbalances can include the seeds of a serious crisis, as we have seen in the some of the affected European countries. The reform will enable us to identify these seeds early enough and take corrective action.
Completing the reform of economic governance with maximum ambition and resisting the short-sighted temptation to water it down is a matter of credibility of the Central Bank of Nigeria, both in the short and long term.
Prevention is always better than correction, not to speak about crisis resolution. Thus, effective economic governance is the best crisis prevention mechanism and certainly more important than any financial backstop can ever be.
So 2011 has been quite a difficult year. But, in retrospect, it may well be seen as a crucial turning point in Nigeria’s economic and political integration if we are determined to complete the fire-fighting task of safeguarding financial stability and the architectural task of reinforcing economic governance.
I think Sanusi can do it while we continue to pray for President Goodluck Ebele Jonathan to be able to curtail the excesses of Boko Haram come 2012.
One of the basic requirements for sustainable business and economic growth is no doubt that of national security of lives and properties. It is high time to resolve all the security and economic issues for a better Nigeria and a better Naira.
As the year 2012 approaches, May your pockets be heavy and your heart be light, May good luck pursue you all day and all night Amen. I am wishing you all a prosperous and glamorous new year in advance.
See you in 2012.
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