FORMER Central Bank of Nigeria Governor Prof Charles Soludo has said that the Nigeria economy is indeed in need of rescue amid failed economic policies which is telling on the country.
He stated this in Lagos, Nigeria at the Vanguard economic discourse. Soludo said the national budget maid others is not working adding that the country is still where it has been since independence.
According to him, “Nigeria economy is in a dire need of a rescue. The national budget is not working. We are still where we were since independence. Nigerians have been trusted to rescue the country. The continuous slide in oil prices and Niger Delta crisis are only a simple explanation of the ongoing economic problems. Nigeria seems to be moving in cycles since independence. Finally, the Federal Government has an economic recovery plan which is supposed to be government’s blueprint for rescuing the economy,” he said.
Speaking further, he said however, the government of Buhari inherited a very bad economy adding that the Jonathan administration had an unprecedented debt accumulation.
His words: “I want to commend the effort, to be fair, the government inherited very bad economy. The previous government had unprecedented rate of debt accumulation even at a time of unexpected oil boom. The previous government was even depleting our foreign reserves instead of doubling what it met. It could have more than doubled the reserves, if it grew it by just 50 per cent,” he added.
Continuing, he said that when President Muhammadu Buhari came to power, inflation was at nine per cent and has risen to about 19 per cent; exchange rate dropped from N197/ N205 to dollar to N305/465 to dollar in the parallel market; unemployment rose from 7.5 per cent to 14 per cent while capital market capitalisation, business confidence and ease of doing business have also worsened.
Soludo said that foreign reserves have been depleted, current account balance negative, wages are declining, half-hearted commitment to deregulation of the petroleum industry.
“The domestic currency style, the economy is in recession, but in dollar terms, the economy has suffered a massive compression. The Gross Domestic Product has shrunk from $575 billion when the government came to power to $357 billion/$232 billion for parallel market rates. The value of the GDP has dropped by more than half. It will be a miracle for the government to return the GDP value to the level it met it,” he said.
Soludo, however, commended the government for plugging the loopholes in the economy. He said that government is inconsistent with plan for economic growth. The governments keep blaming themselves, and are busy chasing rats and losing the cows.
“Nigeria has refused to learn from the history from the booms and bursts cycles. Every government since 1970 has pursued diversification, but failed to pull it through,” he said.
Also speaking, Solid Minerals Development Minister Kayode Fayemi, said the ugly trend in the economy started long ago, and that the present government cannot perform magic in fixing the economy.
“We are not going to perform magic in addressing the challenges facing the economy. But the people may not want to hear this. Our tax base is one of the lowest in Africa,” he said.
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