An International agency, The West African Institute for Financial and Economic Management (WAIFEM) has blamed President Muhammadu Buhari and the Central Bank of Nigeria for the current economic recession in Nigeria.
Its Director-general, Professor Akpan Ekpo, said that the delay in passing and implementing the 2016 budget and the CBN’s monetary and foreign exchange policy stance helped worsened the country’s economic situation.
Professor Ekpo said this in a recent interview with the Vanguard.
He said: “There was a near absence of fiscal policy – the economy lacks the necessary fiscal buffers. Money and exchange rate policies were the only voice. Rather than implementing quantitative easing, the CBN was interested in tightening monetary policy. When an economy is almost in a recession, monetary expansion would help towards recovery,”
“When a commodity is in short supply, market forces cannot determine the ‘correct’ value. The only source of foreign exchange for the economy is crude oil export, hence unrealistic assumptions under a competitive market cannot work in the foreign exchange market,” he added.
“The delay in adjusting the band of the value of the naira to the dollar, when the market provided a guide through scarcity, heightened the crisis. If recession persists, monetary, fiscal policies would be ineffective.”
Going on, he said: “I hate to disappoint Nigerians, the private sector cannot get us out of the recession. Government must lead for the private sector to follow until recovery sets in. As part of stimulating aggregate demand, the social programmes in the budget must be implemented urgently.
“Furthermore, government has no choice but to borrow externally and domestically to spend and get the economy out of the recession.
“Our economy consumes what it does not produce, hence there is need for a re-orientation for citizens to prefer locally produced goods and services. Heavy tariffs must be placed on imported goods and services. Lending rates are just too high to revamp the real sector.”
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