Former Central Bank of Nigeria (CBN) Governor, Prof. Chukwma Soludo, has blamed ‘unprecedented borrowing’ during ‘unprecedented boom in oil prices’ by the last administration as one of the reasons the nation slipped into avoidable economic recession.
Soludo also lamented that instead of spending money to oil the engine of the economy, the Treasury Single Account (TSA) implemented by the Federal Goverment locked up huge funds that should runiing the economy.
He said reliance on oil has done more harm than good to to the country.
He said the current economic crisis being witnessed in the country was avoidable, adding that poor ideas by the country’s policy makers caused led to the problem.
Delivering a paper yesterday at the Nnamdi Azikiwe University Awka, Anambra State, at the 2017 International Conference of the Department of Business Administration, lead presenter on: Managing a Recessed Economy, Soludo said Nigeria slipped into recession barely a year after the current administration took over power due to the inability of the country’s policy makers to rise to the challenge.
Soludo said: “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.”
He said the foundation for the recession was laid by the previous administration which according to him, borrowed to fund recurrent expenditure at a time when oil prices were as high as over $100 a barrel.
He stated that part of the problem was because the country failed to save funds at a time when there was unprecedented boom in oil prices, but rather engaged in unprecedented borrowing.
He said: “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.
“They brought in the 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.”
He said the only way to put Nigeria back on the right track is to think beyond oil.
Another way of tackling the challenges facing the country was 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 said.
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