Former governor of Central Bank of Nigeria (CBN), Prof. Charles Chukwumah Soludo yesterday said the economy is in deep trouble considering the reduction in per capita income and dwindling Gross Domestic Product (GDP). He said the economy had compressed by 50% in the past year.
With inflation already at 16.48 per cent and still rising, most Nigerians are finding it increasing hard to meet their basic needs, as the economy entered into full blown recession following two quarters of consistent negative growth.
His comment on the economy came barely 24hours after another ex-CBN governor and Emir of Kano, Alhaji Sanusi Lamido Sanusi, expressed regrets on the policies of government.
But speaking in Kaduna yesterday in his lecture at the fourth progressive governance lecture series of the Progressives Governors’ Forum in Kaduna, Soludo said the collapse in the oil prices was a blessing for the country to start a new beginning.
His lecture was titled: “Building the economy of states: Challenges of Developing Inclusively Sustainable Growth”. It was organized by the ruling All Progressives Congress (APC) governors.
Soludo stated for instance that the GDP has been compressed to 50 per cent from $578 billion after the rebasing programme of 2014 to $290 billion due to huge deterioration in key economic indications, while per capita income has also dropped from $3,100 to $1,500. He noted that this has to be urgently addressed by economists if the country is to survive the harsh realities and continue as a going concern.
The former CBN boss who further observed that the collapse of oil is a privilege for a new beginning for Nigeria, stated that the current recession was structurally and politically induced and that the APC-led government must stop the blame game and start on a clean slate.
Soludo, a foremost economist, noted that agriculture, which is currently receiving massive attention from the Federal and state governments, may not afterall, serve as a means of economic diversification because many people will be forced out of the business when mechanised farming is fully implemented. “Nigerian economy has been massively compressed by 50 per cent. GDP is being compressed to 50 per cent from $578 billion to $290 billion while per capita income has also dropped from $3,100 to $1,500. “The transition to a Nigerian economy without oil cannot be sustainable by merely pumping money into the system. If the aggregate demand is on one side, we have other things on the other side to consider in order to be able to sustain our economy,” he said. According to him, no state can develop sustainably if the overall governance and economy are in crisis, stressing that Nigerian economy in terms of the dollar has collapsed by about 50 percent.
“Nigeria is facing unprecedented and tremendous political and economical challenges with global and local dynamics. Regardless of these challenges, opportunities and possibilities abound if we address some fundamental issues. The key to achieving this is to have a development plan that is anchored on realizing inclusive and sustainable growth.
He therefore, recommended the restructuring of the economy from consumption-driven to production-based and consistency in micro-economic policies.
“Encouraging fiscal federalism in ways that allow states to have greater control of their resources, evolution of a master plan for mass export-oriented industrialization that answers the economic questions and realities of today,” he said.
At the forum, Vice President Yemi Osinbajo said Nigeria has what it takes to be a great nation, but the desired positive change cannot be achieved except public servants take responsibility for the transformation of the country.
This is even as the Governor of Kaduna State, Mallam Nasir Ahmad El-Rufai said the worst job in Nigeria today is to be a governor.
Osinbajo said: “We have what it takes to make a big difference. Like I said in Kano some few minutes ago, we have the capacity in this country to make a great nation. I don’t believe there is any country, especially on the African continent that has resources, men and material that we have.
“But a lot will depend on us, the public servants, whether we are elected or appointed, we are the ones that can make a difference in this country. If we as public servants, see ourselves as being responsible for transforming our society, we see ourselves as being the hope country and continent need, then perhaps, the change is really possible. But, without us taking responsibility, very little can happen.
“The challenges that many states in Nigeria face today are not self-inflicted, some are historical, they are legacy challenges, but then, we are required to come to the table with fresh ideas to solve the problems. Some of the problems are not problems we can solve in few months or even years.
“We have the next few years to transform this country and I hope we would be able to make that change. Am sure the states here are the ones to make that change,” Osinbajo said.
El-Rufai said Nigeria is facing an unprecedented economic crisis most of which arose from the circumstances of the present and past.
The governor, who also said the worst job in Nigeria today is to be a governor, lamented,” we are left to redeem inherited problems. We don’t have a hand in them, but we have a duty to solve them”. El-Rufai, however, expressed hope that Soludo’s lecture will throw more insights into problems that will help the states to get out of the current fiscal crisis.
In attendance at lecture were Governors of Ogun, Lagos, Kaduna, Bauchi, Plateau, Kebbi, Borno, Adamawa, Osun, Zamfara and Imo states. While those of Kwara, Benue, Nasarawa, Katsina and Oyo states were represented by their deputies.
Reacting, President, Manufacturers Association of Nigeria (MAN), Mr. Frank Jacobs, said Soludo’s comments were very accurate. ”At the moment, many companies are shutting down every day while many are managing to remain in business. It is that bad. Unless there is a drastic change in the policy of government, the unemployment condition in the country will take a turn for the worse,’’ he said.
Also, Sam Willie Ndata, the doyen of stockbrokers, said said it is not only him that has been talking about it, but every other person has been saying the same thing. The country has not been going the way it should go and the government had better sit up and do the proper thing and get the experts to run the government. “If he knows what to do, he should do it fast before everybody dies,” Ndata said.
Also commenting, a former deputy governor of the CBN and social commentator, Dr. Obadiah Mailafia, said: “ I wouldn’t say that I am satisified with the present economy. We need a stimulus package. I have mentioned stimulus package before. I agree with the Emir of Kano as well as Professor Soludo because they have a point. We need a greater and more vigorous leadership. The President has the opportunity to come out with new ideas, the opportunity to be innovative. He should also build a coalition of the transformation of the economy. Right now we are not happy.”
But apparently responding to attacks on Buhari’s economic policies, royal fathers yesterday urged Nigerians who have ideas on how to revive the economy to communicate the Presidency in writing.