Posted by Pamela Eboh, Awka | 19 May 2017 | 1,538 times
Former Governor of the Central Bank of Nigeria (CBN), Professor Chukwuma Soludo, has called on the nation’s leaders to begin to think of Nigeria as a country without oil saying that the present economic recession has served as a big eye opener for Nigerians.
Speaking Thursday in Awka at the 2017 International Conference of the Department of Business Administration of the Nnamdi Azikiwe University (NAU), Awka on the theme, ‘Managing A Recessed Economy: Options for Nigeria’, Soludo stressed that until the mindset of Nigerian leaders were moved away from sharing of oil revenue, the country would continue to experience problems.
While advising that it was necessary to begin to think of alternative to oil, the former Central Bank Governor observed that oil had done wreckage to the country’s economy.
According to him, 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 need for exchange of ideas among intellectuals from various fields to put things right.
“Though economic crisis started in 2007 when most countries were witnessing recession, 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 $10 billion and we kept growing it on annual basis as a deliberate policy such that it was over $45 billion by the time I left.
“In 2010, I warned that if oil prize 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 expenditure.
“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 prize 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, 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,” he stated.
Soludo, however, hailed the recently launched economic recovery plan by government adding that it will eventually lead to recovery, especially as there was mounting pressure on government to perform because election was approaching.
He added, “What I call Abuja’s stranglehold on the economy was impacting negatively on the economy. The number of items in the exclusive list must be reduced in favour of states.
“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.
“The first step should be, to revert the control of minerals to the states, which should pay taxes to the Federal Government.”
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