Former Governor of Anambra State, Mr. Peter Obi, has warned the country’s economic managers against reckless spending of its resources, saying such a habit would compound the nation’s economic woes as it battles to spend its way out of recession.
Obi stated this during a live interview on Arise Television flagship progamme; The Morning Show monitored in Lagos, yesterday.
He said that unlike the 2015 episode when the country borrowed so much to exit recession, it cannot afford the luxury of heavy borrowings and wastages in a bid to rebound the economy.
The former governor said past borrowings by the government were only thrown at consumption as against productivity, warning that government’s failure to embrace fiscal discipline at this period of a fragile economy will spell doom for the country.
According to him, government economic and fiscal policies must be properly aligned, structured and targeted at reaching the target audience.
He advised for instance, that funds earmarked to reflate the MSME sector must get to them as against what obtained in the past when monies appropriated did not get to the beneficiaries.
Besides funds not getting to target beneficiaries, Obi lamented that the amount allocated to reflate such sectors was grossly inadequate compared to what obtains in other countries that are batting recession and have measures in place to reboot their economies.
‘‘There is nothing wrong in borrowings, especially during recession but what is wrong is the inability to account or point to what funds were used for.
In the case of Nigeria, we have not been able to show how such borrowings have impacted the sectors that were meant to resuscitate the economy. And that is what I am warning against in this period of recession.’’
On tax to GDP ratio, Obi said the more robust employments are generated with susutainable growth, the more the country earns from taxes. He added that efforts of government to raise more revenue from taxes may be counter-productive, as it cannot afford to tax unemployed citizens who are battling to survive. The former governor lamented that about 98 million Nigerians were living below poverty line before COVID-19, adding that the figure has further swollen to over 100 people who cannot be taxed at the moment.