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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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