BEVERLY HILLS, May 18, (THEWILL) – A former governor of the Central Bank of Nigeria, CBN, on Thursday disclosed that the resort to borrowing by the Goodluck Jonathan administration to fund recurrent expenditure at a time oil prices were as high as over $100 per barrel laid the path for the economic recession Nigeria is currently struggling to exit.
Delivering a lead paper at the 2017 International Conference of the Department of Business Administration, Nnamdi Azikiwe University, Awka, he stated that the recession could have been averted if the succeeding administration articulated sound economic policies, but regretted that the government could not rise to the occasion.
He noted that Nigeria could have exited recession early through huge spending by the President Muhammadu Buhari government, but two policies ruined the opportunity when “they brought in the Single Treasury Account (TSA) and channeled 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.
“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.”
On how the Jonathan government laid the foundation for the current recession in the country, Soludo stated that Nigeria failed to save funds at a time when there was unprecedented boom in oil prices, but rather engaged in unprecedented borrowing.
According to him, “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 is needed to fix Nigeria is not rocket science, but we do not have the will to fix her.”
The ex-CBN governor however expressed optimism that Nigeria will get out of recession but warned that anymore attempt to enter into recession in the future would be more devastating than what is witnessed today.
To avoid future economic upheaval, Soludo advised that Nigeria must think beyond oil, saying that oil had done Nigeria more harm than good.
“Another way of tackling the challenges of the country is to unbundle Abuja and 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 added.