…Says CBN’s forex policy encourages round tripping
The Director General of the West African Institute of Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, has warned the current administration of Muhammadu Buhari not to allow the economic situation deteriorate to the level of Zimbabwe.
In an interview with TheCable in Washington, Ekpo, pointed out that even late Sani Abacha, a military dictator, allowed experts to run the economy while he was head of state.
Lamenting the current situation where non-professionals are in charge of key ministries, Ekpo said the government of President Muhammadu Buhari needs the assistance of a strong economic management team.
“If you look at Nigeria’s economic history in the last 56 years, there are some episodes where you could say they appointed technocrats to manage the economy,” he said.
“But since 1999, there have been problem because politics dominated the economy.
“The military, for some reasons were able to recruit some technocrats. I can tell you that everything about the Nigerian economy has been researched, documented and written about, before 1999. They are on shelves.
“But from 1999, in fairness to former president Olusegun Obasanjo, he tried in putting together experts to macro-manage the economy. He brought people who were good. Then, he had an economic team that constituted mainly of experts.
“Those experts co-opted other experts to look at the economy. I think it continued up to the time of the late president Yar’Adua. During Yar’Adua’s tenure, I was a member of the team.”
Ekpo, who was a vice chancellor at the University of Uyo, criticised the current foreign exchange policy of the CBN, saying it encourages round-tripping.
“You can see that the misalignment between the interbank and parallel market rates is too much. When I last check, government was still the greatest supplier of foreign exchange, and they give it to the banks to sell.
“Any bank official would be rational and want to round trip. So, the gap is just too much. And that is going to affect foreign direct investments. What you will have is hot money.
“So, when there is a recession, you adopt what is called economic nationalism. So, let’s pray that the economic recession does not continue for a long time, because if that happens and we enter into a depression, we may just be like Zimbabwe or Venezuela.”“So, Abacha approved for him a ministerial advisory committee. He brought in only economics and a lawyer to drive the process during that process. Go and look at the macro-fundamentals at that period. And there was a link between the ministerial advisory committee and the national economic team headed by Prof. Sam Aluko.
While acknowledging that Abacha was a dictator, Ekpo said he left the economy to be ran by experts hence he did very well economically. “I was involved. In fact, I was the chairman of that ministerial committee in the ministry of finance for four years. We ran the economy.”