Oyetunji Abioye and Femi Asu
Some notable economists on Tuesday urged the President Muhammadu-led administration to review, as a matter of urgency, its economies policies or risk further decline in the economic fortunes of the country.
They insisted that the current economic policies of the government were not making the desired impact, hence the need for a comprehensive review.
This came a day after the National Bureau of Statistics released data showing that the economy recorded negative growth in the third quarter of this year, making it the third consecutive quarter of decline.
It also came hours after the Central Bank of Nigeria’s Monetary Policy Committee met and left all the key economic variables, including the benchmark interest rate, which economists have been calling for its reduction, unchanged.
The economy had fallen into a recession in June, after recording negative growth in the first and second quarters of this year.
The Founder, Centre for Values in Leadership, Prof. Pat Utomi; and Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, said unless certain reviews were made to the existing policies, the economy would record another negative growth in the fourth quarter of this year.
Rewane said, “The policies have to complement one another. The fiscal policy is moving in the right direction, but it is not enough. We need increased stimulus and increased injection. But we cannot do this with the current level of interest rates.
“Therefore, something has to happen to bring the interest rates down. The monetary policy has to be consistent with the fiscal policy, or else we will continue to have contraction. And more than anything else, the foreign exchange market has to be reformed. The foreign exchange market, as it is currently constituted, is a bridge to nowhere.”
He told one of correspondents on Tuesday that although the economic management team had done its best, some decisions were also taken very late
“To be honest, the government has done as best it could. But it could have done better in the sense that certain decisions were late. Certain decisions and actions were inadequate. They were right policies, but the dose of the medication and the timing were not aligned,” Rewane added.
Utomi said it was obvious that the economy was in a crisis and there was an urgent need for all stakeholders to come together to chart ways out of the present predicament.
He said, “We are dealing with a complex problem. We know generally they are underperforming. I don’t think we are having quality public conversation.
“At this time that this country is in a major national crisis, we are in a state worse than war. What we need is a war cabinet in which we all as Nigerians come together to discuss what we can do to reconstruct the falling walls of Nigeria.
“There have been reluctance to invest. Investors have generally held back. If business confidence is negative, obviously there will be a slowdown. Contrary to suggestions by government officials that we will be out of recession by December, the indicators that I am hearing about suggest that things will even get worse.”
A professor of Economics at the Olabisi Onabanjo University, Sherriffdeen Tella, said the economy would record another negative growth in the fourth quarter, because the monetary authority was busy mopping up liquidity from the system, while the fiscal authority was trying to inject same into it.
He said, “The GDP will continue to fall as long as the fiscal and monetary authorities’ policies do not align. The liquidity the CBN is trying to mop up is not in the banking system but in peoples’ vaults at home, farmlands and other places.
“I have said four months ago that the only way we can address that is to change the colour of the N500 and N1,000 notes. We need to reduce the interest rate and boost economic activities.”
A professor of Economics at the University of Uyo, Leo Ukpong, said the government needed to choose between high inflation and high unemployment.
He said, “The CBN needs to cut interest rate so that businesses can access loans, services their loans and boost investment. If things continue like this, we will record another negative growth and by January, most employers will sack massively again.”
The Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said there was a need to inject liquidity into the local economy by reducing the benchmark interest rate, and inject liquidity into the forex market by accessing forex line from the International Monetary Fund to stabilise the naira exchange rate.