Trouble as Former CBN Deputy Governor Gives Hint on When Hardship in Nigeria Will End
- A former presidential contender, Prof. Kingsley Moghalu, has said that the current economic challenges in the country would go on for at least three to five years
- He blamed corruption and poor policy response by the central bank for the present state of Nigeria's economy
- According to Moghalu, the crises in the country are all consequences of an economy that had been mismanaged for a long time
PAY ATTENTION: The 2024 Business Leaders Awards Present Entrepreneurs that Change Nigeria for the Better. Check out their Stories!
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
Prof. Kingsley Moghalu, a former presidential contender, has predicted that the current economic downturn in Nigeria and its consequences will persist for at least three to five years.
Source: UGC
The political economist attributed Nigeria's struggling economy primarily to unprecedented corruption and incompetent policy response.
The former deputy governor of the Central Bank of Nigeria (CBN) stated this in his keynote address at the "Leadership Newspaper Group 2024 Conference and Awards" in Abuja on Tuesday.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Nigeria's economy is in distress
He claimed that the state of Nigeria's economy today was a "chronicle of a death foretold," resulting from many decisions the country has made.
Moghalu also said hyperinflation, the crisis of the value of the naira, debt distress, revenue challenges, unemployment, and extreme poverty were all consequences of an economy that had been mismanaged for a long time.
He said:
“The past ten years were particularly ruinous. They were the years of the locust, marked by unprecedented fiscal policy mismanagement, unproductive external borrowing, unnecessary budget deficits, illegal Ways & Means lending by the Central Bank of Nigeria to the federal government to the tune of N30tn, and unprecedented corruption.
“Earlier, a combination of oil price shocks and an incompetent policy response from the CBN, in the form of an attempt to fix the exchange rate, all helped give us two recessions within seven years. Many of these things happened because, as we witnessed, there was a successful political assault on the central bank's independence, with the storekeeper willingly handing over the store keys to the marauders.”
Moghalu asserted that Nigeria is in a crisis regardless of short-term measures, adding that "the crisis and its effects would be with us for a minimum of three to five years."
Hasty government policies
Regarding the latest economic reforms implemented by the federal government, the political economist opined that the choices to eliminate the petrol and FX subsidies were audacious and wise.
He, however, criticised how the administration handled the two significant policy changes that have caused the nation's economy to spiral out of control.
He claimed that the first mistake was introducing these policies hastily without adequately planning for the following morning.
Moghalu suggested that it was a mistake to unify exchange rates and continue trying to "float" the naira in a situation where there was a lot of liquidity.
He claimed that this choice was a factor in the naira's downward spiral since there was no quick tightening of the financial system to support it.
In his advice, Moghalu said the absence of strategy and a lack of philosophy and knowledge of economics called for a daring, imaginative, and well-planned strategic initiative for fundamental economic rebirth.
He said:
“This project, which we shall for our discussion call Project “3-in-3”, should be aimed at the rebirth of three strategic sectors in three years.
“The project, to be scoped and commissioned within the next three months, is to be predicated on massive investment in the development of railway lines (linking all state capitals), housing (mortgage-ready and qualitative to reduce housing deficits incrementally), and agriculture (covering the value chain), to be delivered in the first phase over three years beginning in 2024."
IMF sends message to CBN
Legit.ng earlier reported that the International Monetary Fund (IMF) asked the Central Bank of Nigeria (CBN) to settle the overdue FX backlog to rebuild trust in the apex bank and the naira.
The organisation disclosed this in its recent Executive Board Post-Financing Assessment with Nigeria report.
The IMF insisted that paying the CBN's dollar obligations would rebuild confidence in the bank and the Nigerian currency.
PAY ATTENTION: Donate to Legit Charity on Patreon. Your support matters!
Source: Legit.ng
