Unless there is a fundamental shift from governance approach that focuses on bloated cabinet structure, wasteful expenditures, oil theft, corruption and forex speculations, Nigeria’s economy will continue to be overheated with dire consequences on the naira, erstwhile Deputy Governor of Central Bank of Nigeria, Dr Tunde Lemo has said.
Dr Lemo, who also was a one-time Managing Director and Chief Executive Officer, Wema Bank Plc, spoke as Guest on BOILING POINT ARENA, a monthly online interview discourse on governance and nation building.
Although he excused the present Tinubu administration from blame, he said successive governments in the past have all contributed to the current economic quagmire.
Unfortunately, he said the sole reason why the economic adversities have continued unchecked for many years is because Nigerians lack power to hold our leaders accountable.
According to him, the economic downturn in the country grew this bad simply because the governments at all levels view the monies accruing to them as “cheap money rather than tax payers money”
The topic of discourse was “Persistent Unstable Macro-Economic Environment: Any Way Out?
Answering a question on how Nigeria got it wrong economically, the former CBN Deputy Governor traced the trajectory of the Nigerian economy from 1960 till date and submitted that the oil boom in the 70s and coupled with the expensive lifestyles of the privileged few, led the country on the downward spiral.
He said: “In 1960, we had an agrarian economy, southwest pride itself in cash crop majorly cocoa, and the north, groundnut mainly among so many others and, of course, the middle belt is the food basket and the east we had the palm oil, the rubber and so on and so forth.”
“We struck oil in the mid-60s to late 70s to the point that we had this quotation that money was not the problem but how to spend it.
“That is where we got it wrong. Because we had cheap dollar. Our currency was heavily over-valued in real and effective term.
“We had students in the universities who will collect their bursary and during the long holiday, they jet out to Rome, London, Milan and everywhere. Life then was easy. The Petro dollar that we were earning was subsidizing our expensive lifestyle of the few. Even the government began to earn income they didn’t work for. The buck of the money which the different arms of government were spending was not tax money. Even the electorates didn’t hold them accountable because it was free money and so corruption was the order of the day.
“Overtime we began to expand government expenditure from three regions to four, to 22 states, 19 states and finally to 36 states.”
Dr. Lemo also identified other factors that contributed to the current state of the Nigerian economy, including over-reliance on petrol as a means of dollar revenue, capital flight, food importation, medical education, medical tourism and corruption among others.
His words: “The trajectory of the naira has always been going up, it has never come down. The speculative activities is part of what led us to where we are.”
“Our lifestyle is also why we are where we are today. Food importation in the last 10 years have average over $7bn and they are majorly rice, sugar, and fish.
“Tell me, why should our staple be imported food? There was problem in Ukraine and the price of bread in Nigeria skyrocketed. Travel to Europe, Asia, their staple is what they produce. It is only in Nigeria that our staple is what is imported.
“What about education tourism, between $1bn to $2bn dollars is what we are spending sending our children to schools abroad. What about health tourism, even for common health checks.”
On how to mitigate the impact of the economy downturn, the Ogun state- born financial expert, called on government to ensure that the cost of living is reduced particularly for those at the lower rung of the ladder and to also speed up on the mass transit for workers
He further advised government to sell off the nation’s refineries to the private sector to manage profitably.
“These assets are old. They are no longer as productive as they should be and they can’t be operated by government for profit. Otherwise, we will still be borrowing money to pay for work not done. Let’s sell those refineries as scrap to the private sector. We have seen the example in cement and it has worked. Let’s sell all these non critical assets.”
Earlier, the Olowu of Owu Kingdom, Oba Prof Saka Matemilola who chaired the session appealed to Nigerians especially the young ones not to lose faith and hope in the Nigerian project.
The monthly discourse, the 12th in the series, on governance and nation building is the brainchild of the Initiator and Convener, Dr Ayo Arowojolu, a seasoned Media professional and Public Relations Strategist.