Recession: Our warnings were ignored, says CBN

The application of wrong prescriptions by non-professionals helped the country’s descent into recession, the Central Bank of Nigeria has said.

The CBN, which is in charge monetary policy management, has not been in agreement with ministry of finance and other mangers of the fiscal side of the economy on the best policy prescription for the country whose citizens are grueling under the weight of recession.

The Director of Policy at the CBN, Mr. Moses Tule, suggested that the bank might not be enjoying full liberty in the application of professional solutions to the Nigerian economic challenges.

Part of the problems that exacerbated the Nigerian situation for instance was the insistence by President Muhammadu Buhari to defend the naira value against in the foreign exchange market against the realities of Nigeria’s economic fundamentals.

By the time he came around to accept allowing the naira to be determined via market forces, many investors had got frustrated and had taken their money estimated at over hundred billion dollars out of the system.

Tule while speaking  at the Chartered Institute of Bankers of Nigeria roundtable meeting  on the current economic recession in Abuja on Tuesday, said,   “Some came in as doctors into the macro-economic management and are giving the tools of medical doctors to advise on how to solve the problem of recession. Some came in as carpenters and they are using carpentry tools to advise on the problems of economic recession; some came in as engineers and they are using their tools to advise on how to address economic recession. They have not allowed the professionals to do their jobs. They have not allowed the professional to provide the direction.”

According to the director, the Monetary Policy Committee (MPC) had, since early last year, consistently warned that the nation will slip into recession if urgent steps are not taken but that the warnings were not heeded.

Although fall in oil prices coupled with the Niger Delta militancy are chief factors that pushed Nigeria of the cliff to recession, the CBN chief believes that Nigerians' penchant for imported goods and an absence of export culture have helped to accentuate the downturn.

Tule said, “Oil prices are down. Not only are oil prices down, the Niger Delta Avengers have blown up oil producing facilities and export facilities, severally. “When they blew the Forcados , it took government six months to fix Forcados. That was a loading bay. And after fixing it, they went back and blew it again. So we have oil prices and production going down. The implication is that foreign exchange earnings are going down, but unfortunately, our import expenditure is not going down. It is still in the region of N976 billion, monthly.”

According to him, sitting down and blaming the CBN for the falling value of the naira was futile. He said that if Nigeria wants to get out of the situation there is the need to address how we got there in the first place.

“If we want to regain our place, how did we get here?  We must address that question. The moment we began to prefer imported goods to our domestically produced goods, we laid the foundation and built the superstructure to where we are now. This is a conscious choice. Every country makes the choice where it wants to be. This is what we chose for ourselves as a country,”   he said.