By Brown Chimezie
Mayor Godwin Ngozi-Obi is the Director of Winnerine Management and Professional Training Centre in Lagos. In this interview, Ngozi-Obi, former Lagos State governorship aspirant on the platform of Allied Congress Party of Nigeria (ACPN) in the last general election, took a hard look at the economic policies of President Muhammadu Buhari, especially the Treasury Single Account (TSA) policy and submitted that the policy initiated to fight corruption has escalated capital flight, which has in turn worsened the economic situation of the nation. He also spoke on how Nigeria can recover from recession and return to its position as Africa’s largest economy.
Excerpt:
How Nigeria can exit recession
Recession is not what you can say you are out of without attacking the indices of the problem or setting up parameters that can put things right. As a matter of fact, let it be known that there is an interception of dynamics that bring recession and the economic interface that could show a positive handling and tackling of the problem. It is evident that if all these things had been put to play by factor of research, Nigeria wouldn’t have fallen into this economic quagmire. In a growing economy like ours, there is bound to be complexity which comes from growing population, growth in demand and supply with no corresponding growth in source of income. It is unfortunate that we have continued with obsolete economic theories propagated by the whites, which are no longer relevant to our current economic statute. What we are doing now is what the developed world has left behind and such obsolete policies can never solve our problems.
I can tell you from my findings that our country’s present economic policies are outdated and not in tandem with modern reality. Take, for instance, in economics we were told that demand and supply grow simultaneously; that when demand rises supply also rises but right now, you discover that demand grows while supply remains stagnant.
So what we are experiencing now is different from what we were taught and which our children are still being taught in schools.
Again, economics taught us that you have to retrench to cut cost but it’s not the same thing with the economic reality of the day. You have to cut cost in order to survive. That is not how it should be. In a dynamic society, the population is growing, needs are growing and you are retrenching. How can you meet up with demand? If you have challenges in running your company, what you need is bailout fund not retrenching or closing shop. When you inject fund, you produce more. Sad to say, that is the situation the industrial sector has found itself today.
Bailout for ailing industries
The Federal Government should do the needful by reviving moribund industries like textile mills and others by injecting funds. Monitoring officers should also be appointed to see to effective management of the fund so as to achieve the desired goals.
CBN’s recent injection of dollars into the financial sector
Like before, I said the Central Bank of Nigeria (CBN) has compounded the economic crisis facing Nigeria. CBN, for me, is ignorant of the economic reality facing the country. I strongly believe that the affairs of CBN should be institutionalised. Experts drawn from the financial community should run its affairs for better result.
Now, look at the pitfalls; what they are doing now is cash creation. If you are buying and selling, you are creating cash, you are not creating sustainability in the economy. You are not creating resources buoyancy and solvency. Because before you talk of solvency, there must be continuous buying and selling, export and other economic interplays that promote growth.
Recession occurred because policymakers failed to note increase in population vis-a-vis demand and supply. They have few to share among many. Therefore, there will be stampede.
Using population to advantage
I gave an answer to similar questions like this during a programme on Nigerian Television Authority (NTA). In that forum, I explained that our policymakers have failed to ensure continuity in government policies. Government needs to set up think-thank comprising research fellows who can advise them on the way forward. Because when demand grows, supply should also increase, otherwise there will be confusion. I have the secret to most problems facing Nigeria.
The solutions do not lie in the injection of cash into the system through CBN. This cash they are injecting now is the same cash they are trying to save as part of foreign reserves. So when it is depleted, the country will go back to square one. In the financial system, there are ways of injecting fund into the economy without depleting the foreign reserves.
Do you know how they ruined the economy? They stopped the domiciliary accounts operated in different banks and introduced Treasury Single Account (TSA). They do not know that the economy depends on naira, dollars and goods and services. If you remove dollars or naira from the economy, you would have crises. What they did by introducing TSA was to destroy Nigeria’s financial system.
Cash in foreign currencies being recovered from individuals’ homes
That is one of the problems arising from the scrapping of domiciliary accounts. When you stifle the banking system, people will be forced to remove their money from banks, convert it into foreign currencies and stash it in warehouses and then wait for favourable time to use it. I know what to do to reverse these awkward policies. If I’m made part of the team, I will provide expert advice that could see the country out of this economic mess.
Reviving industries
Government should create industrial rescue fund. Such fund can serve as bailout for ailing industries. Investors should also be given favourable incentives; expert rescue teams should also be established to monitor how the industries manage the bailout funds and the teams should be in all states of the federation to ensure national spread. Such measures, if diligently applied, will see our industries coming back to life.