Obadiah Mailafia, one time deputy governor of the Central Bank of Nigeria (CBN) has attributed the current recession to fiscal indiscipline and delay in implementing enabling policies by the government.
Mailafia, a development economist, in his keynote presentation, “Diversifying the economy and re-engineering growth in an age of diminished expectations at the Laureates of the Nigerian National Order of Merit at the 9th Award Winners Lecture in Abuja traced the root of the current economic situation largely to dependence on a mono-cultural economy, fiscal indiscipline and delay in implementing enabling policies
He explained that the reckless fiscal indiscipline subsequently resulted in massive dollarization of the economy which eventually snowballed into recession. As far as he is concerned, “what we call recession is just dollar scarcity; print dollars today and recession will go”, he stated.
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Udoma Udo Udoma, Minister of Budget and National Planning claims the government has released about N753.6 billion capital despite the biting cash crunch in the system.
Udoma said the money “exceeds the aggregate capital expenditure budget for 2015” and was basically released to the ministry of power, works, housing as well as transportation.
Making this disclosure at the event, the minister said massive investment in infrastructure is the surest way to get the country’s economy out of recession.
He said government therefore is looking at various strategic ways of restoring revenue and getting the economy back on the path of sustainable growth.
Justifying the priority given to infrastructure the Minister said “there is no doubt that government-led investment in public infrastructure is one of the fastest ways to get an economy out of recession”.
He told the gathering that government has been having difficulties funding the Budget because of the disruptions of oil production in the Niger Delta; but noted that notwithstanding current challenges, government must find ways to increase the level of its spending.
“At one time, almost half our production was shut in because of pipeline vandalism. This compounded our economic situation and pushed us into the current recession we are experiencing in the country. We are looking at ways to restore our revenues and get the economy out of recession and back on the path of sustainable growth.”
Udoma explained that the resultant epileptic income stream also affected exchange rate stability, another issue which has to be addressed if the country is to succeed in its development drive.
According to him, exchange rate stability has been a major issue which the Federal Government has been grappling with as a result of the reduction in foreign exchange earnings caused by the fall in crude oil exports.
The minister called for every genuine idea from experts on how to address the economic challenges, saying that some of the recommendations might be directly integrated into the National Recovery and Growth Plan which is currently being tidied up.
The forum which has as its theme: “Mono-economy, Diversification, Exchange Rate stability and the Development of the Nigerian Nation”, was organized to provide a platform for the laureates to deliberate and exchange ideas on salient issues of national interest thereby contributing to national development.
The Minister pointed out that with the implementation of some of the reforms of government, results are beginning to show in some strategic sectors like agriculture which recorded a 4.5% and solid minerals which showed a 7% growth in the third quarter of 2016.
“As you are aware, this Administration came in to meet an economy that was suffering from declining revenues and GDP growth, rising inflation, weakening balance of payments, declining foreign reserves, rising public debt and recurrent expenditure, a weak capital market, as well as rising unemployment. We designed the 2016 Budget specifically to address these issues.”
Udoma emphasized that government’s goal is to have an economy with low inflation, stable exchange rates, and diversified and inclusive growth.