NEWS: Buhari’s economic policies need review, say Utomi, Rewane, dons

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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.

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