How to fix Nigeria’s economy–Soludo, Oshiomhole, others

How to fix Nigeria’s economy–Soludo, Oshiomhole, others

Friday, March 10, 2017 6:00 pm

Governor Adams Oshiomhole


By Kazeem Ugbodaga

Former governor of the Central Bank of Nigeria, CBN, Prof. Charles Soludo; former Governor of Edo State, Adams Oshiomhole and other stakeholders have proffered solution on how to rescue the nation’s ailing economy.

They spoke at the Vanguard Economic Discourse held at the Civic Centre, Victoria Island, Lagos, Southwest Nigeria on Friday.

Soludo, who was the keynote speaker at the event spoke on “The hard facts to Rescue the Nigerian Economy.”

According to him, what Nigeria needed to get out of its economy downturn was statesmanship politics, saying there must be men and women who were ready to pay huge political price to lay a new foundation for the nation.

He said the nation was in dire need of help to salvage it from the present quagmire, lamenting that “there is no doubt that the present government inherited a depleting economy but it is also depleting the foreign reserve it met.”

“If it had even grown it by 50 percent, it would have been a different story by now. Workers have suffered the most in the present government being owed arrears which reduce their nominal life, more so as inflation has hit the roof. Monetary and exchange rate policies are out of this world. We have created havoc in trying to stop the importation of tooth picks.

“We are busy chasing the rat while the local industries are closing down. Nigeria has refused to learn lesson from what happened in the past. I have read all the economic blue prints of all governments since 1970; every plan appears to begin with every government blaming the previous government and at the end of the day, end up doing nothing and the circle continues,” he decried.

Soludo challenged the citizens to hold the government accountable, saying that the All Progressives Party, APC, government promised to give a clean slate from the debris of the past but failed to do so.

The former CBN governor also decried the exchange rate, which has skyrocketed, saying that “in the context of any serious economy, particularly of a post-oil, the exchange rate will be decisive. It will not be silver bullet. The truth is that the micro economy indices would remain dicey until we remove the uncertainty in exchange rate regime.

“There is no doubt that government mean well; as the saying goes, the road to hell is always filled with good intentions. We have wasted too much time to reinvent the will and Nigerians are paying for it. What Nigeria needs now is statesmanship politics.”

Also speaking, Oshiomhole said: “Growth is useful when it affects the lives of people. To me, there is nothing like free market. Who is the market free from or for? When there is no attitudinal change, particularly from the elite class, transparency would just be only a beautiful word.

“How do you diversify economy by pricing money out of the rich of the common investor. Everything about the discussion of the economy is how it will improve the welfare of the ordinary man.”

Former Deputy Governor of the CBN and one of the panelists, Dr Obadia Mailafia, who spoke on the blind spots of national development agreed with Soludo on the facts raised in the lecture.

“However, I do not think that economic blueprint of this government is not economic diversification but a fire brigade strategy to get the economy out of recession. We have forgotten that many of our cities are no longer involved in regional and urban planning. Again, our young ones no longer have a voice.

“If we don’t build for them, if we don’t provide a platform today, we will not have a tomorrow. We need to emancipate our women who are greater in number and reintegrate them into the national polity,” he said.

He decried the poor industrialization, technology and development in Africa, but noted that if the nation must move forward, it must industrialise or be ready to perish.

In his words: “But I dare say that we must industrialise or perish. No matter how well a government means, if it does not have a good civil service to implement his ideas, failure is the end result. We must go back to finding quality civil servants and workforce to be able to interpret policies of government.”

Activist and a member of the National Executive Council, NEC, of the Nigeria labour Congress, NLC, Issa Aremu said the point of departure of the economic recovery plan of the nation was moving away from the contents of section 2 of the 1999 constitution.

He stated that the government should harness resources to create wealth and welfare of the people as well as improve on what other government had done to be able to know “where we are going in the next ten years or more.”

“This new Economy Recovery Growth Plan is still centred on the oil and gas. Business people will want know what we want to achieve in terms of business in public and private sectors. We must have exchange rate policies that grow the economy. We must have a way of controlling capital. The government has done well in banning some products. I think they should even ban more. Instead of giving somebody foreign exchange to go to China to buy fabrics that cannot last, why not give it to Nigerian textile mills to develop.”

Another panelist, Muda Yusuf, who is the Director-General of the Lagos Chamber of Commerce and Industry, LCCI, said there was more that the private sector could do to rescue the nation’s ailing economy, stressing that there was need to involve the private sector in economic recovery.

“However, the key driver is confidence. Getting it right in foreign exchange policy is a critical enablement to getting the economy in the right direction. Again, there are all manners of underhand practices across all levels of the foreign exchange rate chain, which has become disincentives to private sector participation.

“All these have created credibility problem. We need to give way for market to play a role in the direction of foreign exchange policy. Domestic player can have no incentive in a sector where the interest rate is between 25 to 30 percent. Government is borrowing at 18-20 percent, and at risk. So how can the private sector compete in that kind of system? We need to check the rate at which government borrows. It’s scandalous. We need to protect it, but we need to be cautious in the way we do it. The domestic capacity is so weak and it has driving hunger,” he lamented.

Also, former Group Managing Director of Diamond Bank, Dr Alex Otti disagreed with the Federal government’s decision to ban some imported items.

“I disagree that government should ban more things. In fact banning 41 things mean that they must also find way to come back through the back door. You cannot be increasing interest rate in a recession. What drives savings is not rate but a lot of other policies,” he said.

According o him, the CBN should be thinking of bringing interest rate down as it would encourage people to borrow, increase spending and encourage people to invest, adding that there was the need to urgently structure the Nigerian economy.

“We have come into this deceit that we eulogise ourselves as a big oil economy. Again, we celebrated too early of the size of our economy when the GDP rebase was done some times ago. We need to look at the structure of this economy. As we are restructuring the economy, we need to restructure the polity,” he said.

Speaking, Minister for Solid Minerals Development, Dr Kayode Fayemi said all that Soludo had said were actually what the Economy Recovery Growth Plan intended to do, arguing that it was not of planning that “we are suffering from, it is lack of implementation of previous plans.”

“However, we didn’t just get to this point now. The rain started beating us long ago. The present government cannot do magic over night. We still need oil revenue to diversify. Diversification is not tantamount to ignoring oil and gas. It also means making good use of the revenues of the oil and gas. There is no doubt that the government is under-performing but we can also see that our tax system is one of the very lowest,’ he said.

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