The former governor of the Central Bank of Nigeria (CBN), Chukwuma Charles Soludo, has expressed support for President Muhammadu Buhari’s emergency economic bill aimed at reviving the economy, a report by The Cable has said.
Soludo has also proposed to the All Progressivess Congress (APC)-led federal government, a public spending of 15 per cent to 20 per cent (N14trillion to N19trillion) of the nation’s gross domestic product (GDP) to steer the country out of recession.
According to Soludo, Nigeria is ranked number 13 in the failed/fragile state index, behind Somalia, South Sudan, Central African Republic, Sudan, Yemen, Syria, Chad, Congo D.R., Afghanistan, Haiti, Iraq, and Guinea.
This, he blamed on uneven economic development, poverty and economic decline, demographic pressure, group grievance, refugees and IDPs, human flight and brain drain, state legitimacy, human rights issues and rule of law, poor security apparatus, factionalised elite and external intervention.
He noted that Nigeria’s GDP compression from about $575 billion to about $296 billion (almost 50%) back to 2nd position in Africa after South Africa could have been avoided.
“Exchange rate and crude capital controls: confusing trial-and-error of tried and failed neo-socialist command and control policy regime of 1960s- mid 1980s.
“As predicted, quantities (employment and output collapse)! Capital market comatose; capital flight with vengeance, private investment pulse, inflation soars, and twin deficits exacerbate. Economy in Recession compared to APC 10% Growth; 3 million jobs p.a.”
He said the recession was caused by “delayed, incoherent (dysfunctional) and incomplete adjustment exerting great toll on the economy.
“FGN budget in US$ is smallest in recent years $15- 19bn depending on exchange rate and about 5% of GDP— or approx. $80 per capita,” he said.
Soludo warned that it “must be seen as only ‘first step,” adding that the problems are “beyond short-term demand management.”