Ex-governor of Central Bank of Nigeria (CBN), Chukwuma Soludo, has blamed the current economic crisis in Nigeria on bad government policies that were made during the oil boom. He said the previous administration borrowed to fund recurrent expenditure at a time when oil prices were as high as over 100 dollars to a barrel and this laid the foundation for the recession.
Soludo made this known on Thursday, May 18, while speaking at the 2017 international conference organised by the department of business administration of the Nnamdi Azikiwe University, Awka.
The former CBN governor noted that Nigeria could get out of the current economic setback faster if the government appropriate policies are put in place.
He said, “Part of the problem Nigeria is having in its quest to get out of recession is poor policy. Huge spending by government was one of the ways of solving the economic problem, but two wrong steps by government ruined that.
“They brought in the treasury single account (TSA) and channelled funds into one account that did not allow spending… they also fixed the price of foreign exchange. These are things you do not do.”
He complained that Nigeria failed to save funds at a time when there was unprecedented boom in oil prices.
“Poor ideas transcended over superior ideas, and we went into recession which was slightly avoidable, that is why academics must be alive to their responsibility of nudging us to reality,” Soludo stated.
“If you borrow at a time of boom, what will you do in a time of lack? Even my grandmother in the village knows this. At the same time when we had boom, we had unprecedented unemployment.
“The problem with Nigeria’s successive policy makers is that once oil goes up, we take it that it will remain so, and we continue to spend. But once there is a shock and oil goes down, we just think it is temporary and we start borrowing.
“Nigeria can be fixed, and what it needs to fix Nigeria is not rocket science, but we do not have the will to fix her.”
Soludo urged the government to diversify the economy beyond oil in a bid to save it from shocks induced by the inconsistencies of the International oil market. He also called for decentralisation of powers from Abuja to help the states and local governments live beyond “running to the centre for their existence and sustainability”.