A former governor of the Central Bank of Nigeria (CBN) Prof Chukwuma Soludo has stated that the poor economic ideas implemented by the present administration is the reason Nigeria fell into recession.
He lamented that fixing the nation’s economy is not as difficult as the administration’s policy makers would want Nigerians to believe.
Soludo made the observation while presenting a paper at the 2017 International Conference of the Department of Business Administration of the Nnamdi Azikiwe University, Awka, Anambra State on Thursday.
The theme of the conference was “Managing a recessed economy; options for Nigeria.”
According to the renowned economist, Nigeria began to witness economic downturn barely a year after President Muhammadu Buhari took over power, because the country’s policy makers were unable to rise to the challenge.
The recession, Soludo noted was avoidable had proactive steps been taken by the government in its early days.
“Poor ideas transcended over superior ideas, and we went into recession which was slightly avoidable. That is why academics must be alive to their responsibility of nudging us to reality; the reason I commend you for this international conference.
“Success and failure are all in the mind and only those who persist get to their destination.
“The recession Nigeria went into was largely avoidable and for things to change for the better, Nigeria cannot afford intellectual isolation because there is a need for exchange of ideas among intellectuals from various fields to put things right.
Read also: What CBN must do to rescue Nigeria’s economy –Soludo
He continued, that “The Nigerian economy was growing because of the power of ideas of the people in charge. Instead of sustaining the growth, we drove the economy into this recession.
“For example, between 2010 and 2014, oil price was above $100 per barrel but we were unable to accumulate foreign reserve. When I took over as the CBN Governor, foreign reserve was about $10bn and we kept growing it on an annual basis as a deliberate policy such that it was over $45bn by the time I left.
“In 2010, I warned that if oil price went down to below $40 per barrel, most states would not be able to meet their obligations and that was exactly what happened. So, the problem was that we were not saving and we were even borrowing to implement recurrent expenditures.
“We were borrowing for consumption and for capital projects with the result that all the money we spent was borrowed at a time.
“When the oil price slumped, some people in government even felt that it was not going to last and continued their spending spree. Some also felt that the exchange rate could be fixed and some of us warned that doing so would result to high inflation.
“And when the problem manifested, a fire-fighting approach was adopted by the CBN which decided to give bailout to states. Because of these responses, the economy witnessed a shock and we thought we could reinvent economic theory and principle as a unique Nigerian approach.”
Soludo also subtly put in a word for resource control by the states, which he said should be allowed to take control of the mineral deposits in their states, and in turn pay taxes to the federal government.
The former CBN boss condemned a situation in which all tiers of government gather in Abuja to share allocations.
“We do not have to be running to Abuja for everything and that was why I was surprised when some people canvassed that local governments should be going to Abuja to take their allocations directly,” he noted.
He was however optimistic that the economic recovery plan recently launched by the Buhari administration would lead to recovery, especially as the elections are close at hand, and there would be pressure on government to perform.
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