A former Central Bank of Nigeria (CBN) Governor, Prof Charles Chukwuma Soludo, has said that the current economic recession being witnessed in Nigeria is avoidable, insisting that it is caused by poor ideas by the country’s policy makers.
Soludo made the remark at the Nnamdi Azikiwe University, Awka, where he was the lead paper presenter at the 2017 International Conference of the Department of Business Administration Thursday.
Speaking on the theme: “Managing a Recessed Economy”, he noted that Nigeria slipped into recession barely a year after the current administration took over power, and the inability of the country’s policy makers to rise to the challenge plunged her into recession.
“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,” Soludo said.
The former CBN governor however stated that the foundation for the recession was laid by the previous administration, which he said borrowed to fund recurrent expenditure at a time when oil prices were as high as over $100 to a barrel.
He said part of the problem was because Nigeria failed to save funds at a time when there was unprecedented boom in oil prices, but rather engaged in unprecedented borrowing.
“If you borrow at a time of boom, what will you do in time of lack? Even my grandmother in the village knows this. At the same time when we had boom, we had unprecedented unemployment.
“The problem with Nigeria’s successive policy makers is that once oil goes up, we take it that it will remain so, and we continue to spend. But once there is a shock and oil goes down, we just think it is temporary and we start borrowing.
“Nigeria can be fixed, and what it needs to fix Nigeria is not rocket science, but we do not have the will to fix her,” Soludo said.
He said that part of the problem Nigeria was having in the quest to get out of recession was poor policy. Huge spending by government, he further noted, was one of the ways of solving the economic problem, but two wrong steps by government ruined that.
“They brought in the Single Treasury Account (TSA) and channelled funds into one account that did not allow spending, and they also fixed the price of foreign exchange. These are things you do not do.”
He insisted that it was easy for Nigeria to get out of recession, but that anymore attempt to enter into recession in the future would be more devastating than what is witnessed today.
In proffering solution, Soludo said that the way to put Nigeria on the right track is to think beyond oil, saying that it had done Nigeria more harm than good.
“Another way of tackling the challenges of the country is to unbundle Abuja, trim down the exclusive list. We do not have to be running to Abuja for everything. That was why I was surprised when some people canvassed that local governments should be going to Abuja to take their allocations directly,” he said.
Chairman, Senate Committee on Tertiary Education and TETFUND, Senator Barau Jibrin, who was represented by Alex Unachukwu, was also a speaker at the conference. He thanked the institution for coming up with such a conference at a time Nigeria needs the knowledge of academics to tackle her challenges.
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