How Nigeria’s battered economy tore Soludo, Oshiomhole apart

A former governor of the Central Bank of Nigeria (CBN) and former governor of Edo state, Adams Oshiomhole on Friday had a brush over the nation’s economic situation.

The duo who attended the Economic Discourse put together by Vanguard in Lagos were in disagreement over how Nigeria’s economy came to its present state.

The talk shop had as its theme: “The Hard Facts to Rescue the Nigerian Economy.”

The two former government officials went for each other’s throats, and the moderator, a former founding managing director of Guaranty Trust Bank, Mr. Fola Adeola had to step in to calm frayed nerves.

Delivering the keynote address, Soludo revealed how recession, in 2016, reduced Nigeria’s Gross Domestic Product (GDP), by about 38.4 per cent, having shrunk from about $575 billion to about $354 billion.

The professor of economics told his audience that the worst thing that had happened to Nigerian economy, through out 2016, was the instability of the naira exchange rate, which at a point was no longer used by experts as the basis of monitoring the indexes of growth of the economy or otherwise.

He added that the present downward figure of the GDP was calculated based on official exchange rate of N304 to a dollar, when in reality it would have been far less using the unofficial, or the parallel exchange rate.

He said more concerted efforts need to be made to ensure a quicker turn around of the prevailing bad situation, as witnessed in the recent past.

Hear the former CBN boss: “In the previous 16 years, Nigeria’s GDP more than doubled in US dollar terms.

“But irronically, in less than two years, depending on the exchange rate you use, we have more than reduced the value to less than 50 per cent of what we met, in less than two years, in US dollar terms.

“We would get out of recession any moment from now, with oil price increasing.

“It would be a miracle , if the government is able to return the GDP in US dollar terms back to the level it met it, even by 2023,” he said.

The way out, he stated, lies on the Federal Government unveiling of its Economic Recovery and Growth Plan (ERGP), adding that this could still be expanded to ensure economic diversification at the long run.

“To be fair, this government inherited a bad economy. The previous government had an unprecedented rate of debt accumulation, even at a time of unprecedented oil boom and was even depleting our foreign reserves instead of doubling the reserves,” he added.

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However, Oshiomhole in his remarks during the panel session, where the Minister of Solid Minerals Development, Dr. Kayode Fayemi, defended the government, Oshiomhole accused Soludo of abuse of office, by enriching two new generation banks to the tine of about N8 billion, when he wrongly allocating millions of dollars to them a day before the naira was devalued.

He said, “I got some intelligence from my comrades who worked in the system and we found out that the CBN under Soludo had just allocated couple of millions of dollars to two, as they were then known, new generation banks.

“And I asked Prof (Soludo), if you were going to devalue by Friday, why did you auction dollar at a lower rate on Thursday? I accused Soludo, I said you have enriched these two young men to the tune of N8bn, courtesy of your internal abuse.

“When the regulator behaved in this manner, then the Nigerian condition is much more serious than we can appreciate it. We need to deal with issues of attitude.”

Soludo in reply, lamented that Oshiomhole was changing the subject of discussion because he probably had no answer for the issues raised, which drew laughter and claps from the audience.

When the moderator tried to stop Soludo by telling him his time was almost up, the audience answered with shouts of ‘No’, ‘No’, indicating they wanted to hear more of what Soludo had to say.

Soludo continued, “This debate has only begun. Adams made the point about exchange rate and exchange allocation to two banks. I want to say for the record that Adams Oshiomhole has lied. I didn’t say he misquoted anything; he has lied”.

He explained that at the time, banks were bidding for forex two to three times a week, and that only successful ones were allocated forex.

According to him, he was not even part of the bid as there was a committee for the purpose.

“Every bid produced a different exchange rate and there were different winners at every bid. We didn’t do devaluation as the case may be; we had the currency depreciating as the market determined day to day. With all due respect, I think if you (Oshiomole) don’t know what to say, sir, just don’t get into this kind of personal allegation,” he added.

A number of other dignitaries at the event who profered solutions to the nation’s troubled economy were, Dr Kayode Fayemi, also a former governor of Ekiti State and current Minister of Steel and Solid Minerals, Issa Aremu, the deputy president of the Nigerian Labour Congress.

 

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