Govt’s bad policies, not oil price put us in recession –Utomi

A renowned economist, Prof. Pat Utomi says that the recession the nation has found itself was caused by bad policies of government, and not the drop in price of crude oil.

Utomi, a former Presidential aspirant, and Founder of the Lagos Business School, now Pan African University, noted that the nation could still have escaped falling into economic recession if government had put the right policies in place at the right time.

Speaking in Lagos at the weekend, during the 2016 Men Summit of the Catholic Men Organisation of the Holy Family Catholic Church, FESTAC Town, Utomi said the collapse in oil prices ought not to have plunged the country into crisis, if the authorities had acted rightly.

According to him, what government ought to have done, was to borrow money against its assets, devalued its currency early enough and applied intelligent leadership, to avoid the crisis that the country is now faced with.

He further lamented, that the attitude of the present administration also scared away foreign investors who were initially willing to take a risk on Nigeria.

Read also: Nigeria records worst FDI status, loses $2.34bn in 13 months

Prof Utomi added, “At that time, the difference in Nigeria’s nominal exchange rate was there and because the major revenue was oil, whose prices had gone down, all that an intelligent leadership needed to do was to borrow against some assets, ensure they continue to fund things, use strong determination to make sure people don’t buy more than what they don’t need because that is part of what happened and ensure that there is confidence in the system so that people will know that the people in charge know what they are doing.

“That would have made people to start transacting normally. But they said how can we devalue? We will not devalue, people who have money and who wanted to bring in money felt that these people are about to make decision that might jeopardise our money tomorrow.

“So they didn’t bring it. Even oil companies were not bringing back their receipts and Nigerians who were exporting were not bringing back, so there was a major crisis. Instead of the thing devaluing by 6 per cent, it went down to what we are seeing. So it is self-inflicted and quality of leadership.’’

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