ENGINEERING PRACTICE IN AN ERA OF ECONOMIC RECESSION THE NIGERIAN EXPERIENCE AND LESSONS BY ENGR. BASSEY EKANEM (FNSE)

ENGINEERING PRACTICE IN AN ERA OF ECONOMIC RECESSION THE NIGERIAN EXPERIENCE AND LESSONS

INTRODUCTION: The term recession as it affect the generality of Nigerians in their living standard has become something like a theme song.

A garri seller whose wares are costing almost twice the price of same product would allude the almost 80% price increase compared to late 2016  price as due to recession same goes to the Yam dealer, the Goat seller infact virtually all home grown agricultural/industrial products have seen upwards of 100% price increase year/year For the layman, recession has swallowed the word INFLATION.

I have come across some funny pictures depicting what a typical Nigerian does or ready to do to survive the harsh economic climate I can mention about 4 of them.

1)      One has a husband sending the wife packing for allowing their stew get burnt considering the astronomical price of tomatoes used in the stew preparation and believes in these austere times  no good wife can forget her stew on fire.

2)      There is this picture of a man sleeping with a bag of rice and 2 tubers of yam on top of his bed as he can’t risk allowing it get stolen.

3)      The third one is this picture of a dog on top of a soup pot trained by the family Head to bark and stop any-one with any idea of stealing soup from the pot.

4.)     There is also this pot of soup the bread winner uses padlock to regulate and check unauthorized guest.

Am sure some of the pictures could be Photoshopped but truly I give kudos to Nigerians for their indepth creativity in high-lighting the tough times they are passing through.

The Nigerian Bureau of Economic Research defines economic recession as a “significant decline in economic activity spread across the economy and lasting for more than few months, visible though whole sale –retail sales, industrial production employment, real income, gross domestic product. In summary the economic recession can be said to be on the increase if indices from National bureau of statistics do indicate long lasting increase of un-employment, drop in stock market, negative growth of GDP and even  in the Housing Market

The good news how-ever is it’s less severe that economic depression. Economic depression is like a king Recession, like the great American depression of the 1930’s

An Economic recession can be best defined as the decline of the GDP for two months or more in two consecutive quarters. GDP is the aggregate value of goods and services produced in a state or country within a year.  Nigeria is currently getting out of recession as indices has indicated a double quarter growth   of 0.55% for 2017. How-ever Nigeria went into recession because of significant decline in (services/goods) GDP in first and second quarter of 2016.

The data shows a GDP decline of 0.36% in the first quarter of 2016 followed 1.5% in the second quarter of 2016. This could be traceable partly to the Niger-Delta crisis that halted significant quantity of our main revenue earner, crude oil’ from being exported coupled with poor world oil prices that dipped as low as $32/barrel before rebounding to its present high of $59 for bonny light. Crude.

Let’s look at a few agricultural products average year to year prices between January 2015 – December 2016

From the date released by National Bureau of statistics we can see evidently that the 2016 year was quite challenging. How-ever there seems to be a slight rebound in 2017.

MAIN INDICES OF ECONOMIC RECESSION

1. Reduced Real Salaries: It is connected with the salaries adjusted for inflation. Real Salaries in comparative terms connotes that workers can’t buy the same amount or quantity of goods.  The workers can make the same amount of money but the purchasing power has depreciated.
2. Reduced Consumer Confidence; if consumers are assured that the situation in the economic sectors is bad, the less likely they would want to spend their meager income. It’s a psychological factor, but it has real influence in the state of economy. Take a trip to Abuja and see thousands of houses in estates that have been built and remain un-occupied for over 3years.
3. Increased Inflation Rates; with the increased inflation, we can expect a signal decrease in the workers purchasing power with consequent decrease in money.
4. High Interest Rates; It damages the money liquidity thus reducing money for investment.
5. Accumulation of Debts; Where the country can’t pay its citizen enough money, more debts get accumulated strangulating economic activities. Thanks to the Paris loan Refund, some states would have been owing workers upwards of 18 months unpaid salaries, and the previous Federal Government special loan to states.

Un-employment Rate; For most advanced countries, the normal un-employment rate varies from 0.5% to 7.5%. How-ever here in Nigerian they are no clear statistics as to the rate of Unemployment. It’s how-ever brazenly and in arguably true that un-employment in Nigeria is out-rageous  up to 70% less than 5% of our Youth –corpers that pass-out quarterly find new jobs. The rest resort to either self- employment or just loiter around.

This has become breeding grounds for crime in Nigeria and has galvanized the tempo of political / economic agitations.

6. General Loss of Confidence in Government;

This can lead to meetings, demonstrations and riots which will only increase the economic recession.

CAUSES OF ECONOMIC RECESSION IN NIGERIA

1. Poor Economic Planning:

It generally portends to not having a clear defined or concrete economic policy.

In 2015, An outrageous policy of CBN was witnessed where CBN provided dollars at N197 to few individuals/companies as against a parallel rate of N397.00. These caused serious hoarding and distortion in the economy. All it takes to get rich was just to strike a deal with officials of CBN procure dollar at N197/$ and sell to the black-market at N397/$ and split the difference.

The difference made by these individuals/companies strangulated the economy the more. This money could have been invested in salaries, health care, agriculture; Roads etc etc. People then were just sitting idle and making money from no-where. A great economic fallacy.

HIGH INFLATION RATE

We have already mentioned this in my earlier submission on the fall outs or indices of recession. One of the acute causes of economic recession was the banning of agricultural products without gestation period. These products like tin tomatoes etc were banned for import as Nigeria decided to fill the gap by itself Nigeria current inflation is put at 18.63% this is a record.

HIGH INTEREST RATE:

Due to uncertainly in the Nigeria economy which was precipitated by low crude production (at a stage only 600,000 bpd) was produced out of our capacity of 2.4m bpd, and poor crude prices hovering then around $30/bb.

This brought low confidence by investors and resulted in their dis-investment resulting in more un-employment.

This caused very severe GDP damage for the country

We also have other areas such as high taxation, Policy conflict, single Treasury Account implementation that caused  over 480,000 job losses in banks and their in-ability to lend to  stimulate the economy.

CONFLICT ZONE WITH ENGINEERING PRACTICE

The profession of engineering and its practice, was it shielded or exempted from the above impact of recession?

First let’s define what truly is engineering.

The most familiar definition of engineering which is all encompassing defines it as science of harnessing all natural resources bestowed by nature and using knowledge gained from study and practical application of pure sciences such as Physics, Chemistry, Mathematics even Biology to advance and create structures or machines such as roads, bridges, dams, electricity, communications etc. for the well-being or advancement of mankind.

A person who is skilled and trained in the design and construction of the above enumerated items is called an Engineer.

Having thus defined what is Engineering and who is an Engineer, we can come to the barren truth that He is definitely affected, because what he does or produce takes a nose dive or witnesses a reduction in demand due to the Hydra Headed Monster called RECESSION.

As the economy slows down, the activities of the engineer is grossly affected as less of his services are patronized or needed right from consumption of his products by Government, Companies and even individuals in such areas as design/ construction of roads, houses, bridges, Dykes, bridges, Machines (light & Heavy), etc, etc.

He gets retrenched by a company where he is working, as the down turn in economic activities has made it a near impossibility to continue to pay for His services by a company who’s owed by Federal Government or state Government, and who in turn cannot get a loan from the Bank to keep going. It’s a chain event, it’s an ill wind that blows everyone ‘foul’ air. I can say it’s worse than Hurricane Katrina or the most recent that devastated Florida and Environs called Hurricane Irma

So the Engineering profession could be said to be one of the most hardest hit in terms of slow- down in economic activities in a recession. The other professions like medical Doctors, Pharmacists etc might not be hit that hard. Medical Doctors treat sick patients, irrespective of the hard times but how-many Federal or State Agencies are building Fly-overs, Trunk  A Roads, Bridges, Dams We know how many years it’s still taking the Federal Government to deliver on the 2^nd Niger Bridge,  the State Government on the Uyo- Ikot-Ekpene Road and Tropicana Complex completion, just to mention a few.

What this typically translates to is that all Engineers should wake up and harken to the clarion call to get engaged in politics and decide the direction of affairs of things in this state and even Nationally, because we are the worst hit economically when the economy goes wrong. We look forward to a day we shall have an Engineer as a Governor or President of this State and Country respectively.

Stand up colleagues and let’s rise to the audacity of our faith..

We can do it, yes we can!!!.

Thank – you

Engr. Bassey Ekanem (FNSE)