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• Says current economic crisis’ll last 3-5 yrs
From Aidoghie Paulinus, Abuja
Former deputy governor of the Centre Bank of Nigeria (CBN), Professor Kingsley Moghalu, has passed a damning verdict on the administrations of former presidents, Goodluck Jonathan, Muhammadu Buhari and that of the incumbent President Bola Tinubu, describing their periods in governance as years of the locust.
Moghalu spoke during the 16th edition of the Leadership Annual Conference and Awards 2023 in Abuja, yesterday.
Delivering the lecture, titled: ‘An Economy in Distress: Which Way Forward,’ the Chairman, Advisory Board and Board of Directors, Africa Private Sector Summit (APSS), said there was nothing happening today, whether hyperinflation, the crisis of the value of the Naira, debt distress and the revenue challenge, unemployment, and extreme poverty, that should surprise any right thinking citizen or professional observer of how the nation’s economy has been mismanaged for a long time.
“Choices have consequences, there is hunger and anger in the land. The past 10 years were particularly ruinous. They were the years of the locust, marked by unprecedented mismanagement of fiscal policy, unproductive external borrowing, unnecessary budget deficits, illegal ways and means lending by the Central Bank of Nigeria to the Federal Government, to the tune of N30 trillion, and unprecedented corruption.”
He noted that 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 to give the country two recessions within seven years.
“Many of these things happened because, as we witnessed, there was a successful political assault on the independence of the Central Bank, with the storekeeper willingly handing over the store keys to the marauders.
“We are in a crisis. Regardless of whatever short-term measures that are taken, and the success of those measures or lack of it, this crisis and its effects will be with us for a minimum of three to five years.”
Moghalu said although the immediate aspects of the Mexican Peso crisis lasted for two years from 1994 to 1995, the effects lasted for about six years. He added that the Asian crisis of 1997-1998 was relatively brief and over in two years, saying that the crisis originated in Thailand after the Thai government floated the country’s currency, the baht, owing to a shortage of foreign currency to support its peg to the US dollar.
“As with Nigeria, the Thai central bank stopped defending the baht after some months of pressure on the currency, and the baht fell quickly and deeply in value. The contagion spread to other Southeast Asian countries. But, the increasingly strong economic fundamentals of these countries helped their relatively quick recovery.
“We must not waste the present economic crisis. While we attempt to tackle our immediate problems, we must understand that these challenges today are simply symptoms of root causes we have long ignored. We should not repeat the cycle of past crises that did not force us to fix our economy for good, to be productive and create wealth and jobs for the average Nigerian. It is time to reposition our economy for the long term, out of the lessons of today’s challenges.
“I maintain my position, which is a matter of record, that the decisions to remove the petrol subsidy and forex subsidy were bold and correct. We have lived a lie for 40 years and the chickens have come home to roost. Given the country’s revenue challenges in the crude oil production and export sector, Nigeria could no longer afford to subsidise the importation of refined petrol, at least fully, and could no longer afford to defend the value of the Naira artificially.”
Tracing the immediate causes of the economic mess being experienced in the country by the Tinubu administration, Moghalu listed the precipitate nature of the introduction of the policies without a thorough preparation for the morning after; exchange rate unification and a further effort to “float” the Naira in an environment awash with Naira liquidity – a loose monetary environment; and the appointment of the President’s cabinet which took too long in a sensitive period of transition, among others.
Moghalu, however, said the country must emphasise on the quest for nationhood, do away with bad governance, employ a strategy for achieving set goals, have a clear destination and plan, have a philosophy and knowledge, do away with financialisation and de-industrialisation, among others.
On the way forward and possible solutions, Moghalu called for the rollout of a bold, visionary and engineered strategic project for fundamental economic rebirth.
Speaking earlier, Chairman of the Leadership Group Limited, Zainab Nda-Isaiah, said the conference and awards year-after-year, provided an exceptional platform in setting the agenda and offering solutions and new insights to a range of the country’s problems.
“Today’s event coincides with the 20th anniversary of the founding of LEADERSHIP, the dream of one man, my husband, the Great Sam Nda-Isaiah,” she said.
Honoured at the event were President Tinubu as the Person of the Year; Mr Peter Obi and Senator Natasha Akpoti-Uduaghan as Politician of the Year, among others.
In attendance were President Tinubu, represented by the Minister of Information and National Orientation, Alhaji Mohammed Idris; the 2023 presidential candidate of the Labour Party (LP), Mr Obi and his vice presidential candidate, Sen Yusuf Datti Baba-Ahmed; Oyo State Governor, Seyi Makinde; Katsina State Governor, Dikko Umar Radda; Governor of Benue State, Revd. Fr. Hyacinth Alia, and his deputy, Samuel Ode; Niger State Governor, Mohammed Umaru Bago, and Jigawa State Governor, Umar Namadi.
Also in attendance were the Minister of Budget and National Planning, Atiku Bagudu; the immediate past Governor of Katsina State and former Speaker, House of Representatives, Aminu Bello Masari, and former national chairman of the Peoples Democratic Party (PDP), Senator Barnabas Gemade, among others.
