Wednesday, April 23, 2020 / 6:21 PM / Bukola Akinyele
for WebTV / Header Image Credit: fb; George Ashiru
As emerging technologies continue to change the way people work, communicate, learn and think the world is becoming a different work and living space. The changes emerging from the COVID-19 induced socioeconomic space was brought to the fore by CEO of Honeycorp, Mr. George Ashiru on WebTV's #Coronanomics programme where he called on the government and the private sector to give priority to investments in automation and e-governance to drive efficiency and upscale operations.
According to Ashiru, the lockdown is changing the way Nigerians live and rework their work plans around the application of evolving technologies. Indeed, judging by the recent 300% crash in benchmark crude oil futures prices the global economic and energy architecture has witnessed a major and possibly permanent shift.
Ashiru explained that, "It simply means that government will end up borrowing more because once your budgeted income which is already a deficit budget is now impacted by a factor of 50% and when you look at N7.3trillion in expenditure (not taking into account bailout expenses), the fiscal outlook appears cloudy. Furthermore, when we look at income which is likely to be halved we could expect a budget deficit in the region of US$5billion. We already have a debt stock of internal and external debt of US$83billion".
In his contributions, CEO Frontier Africa Report, Mr. Boason Omafaye, co-host and guest analyst on the programme noted that the crash of international oil prices would have severe economic implications. Omafaye was of the views that the international oil market was at the bottom of barrel. He noted that one of the easiest and fastest ways to resolve the fiscal challenge was to take a knife through the country's public and civil service and its heavy political architecture of officers and aids. Omafaye argued that budget cuts as 50% should be implemented across the various states of the country as Federation Account Allocation Committee (FAAC) revenues take heavy knocks.
He said that this was the time to take drastic cuts to state Houses of Assemblies and the executive branch of government as well. Omafaye note that the fiscal authorities needed to save money and be honest with themselves that they could no longer cope with the burdens of past fiscal expenditures .
He noted that Nigeria needs to cut off excess fat. Omafaye noted that, "It is not only oil price that has collapsed the entire industry has collapsed". Such as demand and supply has collapsed likewise the price too. He said it is the time to do this measures we have a political way to do it before 2023 election.
In reaction to Omafaye's comments, Ashiru, said he has always advocated for public service because the greater expenditure that government earns goes to the public service. The private sector generates 70% of our GDP, the external income that the government relies on goes into funding the public service.
He said, this is the time for public service reforms which would reduce annual fiscal costs. He said that the country would see a major reduction in the demand for foreign exchange but this would be complicated by weak domestic supply chains and supporting industrial infrastructure.
He observed that Nigerians in the diaspora represent labour export with remittance inflows rounding up to $30billion. Ashiru said that if the country could continue to export high quality labour services and skills then there would be ancillary benefits with revenues coming from global industries such as technology, medicine, pharmaceuticals, and healthcare.
In his opinion, it is necessary that the federal and state governments improve their levels of automation. He said there is a national strategy for e-government which is yet to be automated. Ashiru urged that the spread of the coronavirus pandemic should be reduced in Africa so that businesses can restart, reset and grow on a long-term stable basis.
Omafaye, in a further remark of the changing business realities noted that the Central Bank of Nigeria (CBN) said in a recent report that this may be the end of a globalisation. Every country would have to build its own supply chain.
However, speaking on the strategic implication of the pandemic for businesses in Nigeria, Ashiru said that what businesses should do was not to focus on the negative but to focus on evolving opportunities. He cited super markets as an example that realised that people cannot get to the super stores any longer but have found a way around logistics with technology.
Ashiru reaffirmed that Artificial Intelligence would rule the future and noted that the government must intervene in the short term to support businesses because in the short term most businesses are extremely vulnerable, especially in an environment of weak foreign reserve. He also emphasised that what businesses should be doing now was to implement business continuity plans while the government should encourage banks to provide soft business loans to stimulate an economic reset that would improve manufacturing and employment.
He said that the underlying reason for a government bailout was to ensure that business was sustained while money circulates amongst multiple domestic value chains. Ashiru believed that the government should ensure that the bail out should help small businesses and spur an early recovery from what appears to be an impending recession in Q2 2020.
According to Ashiru, the future of work would be remote work stations because of the way COVID-19 has affected global work-life balance. He noted that Artificial Intelligence would still take over business processes making technology critical to any nation and would require major investment.
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