AGANGA, SOLUDO: NEEDLESS FACE-OFF ON THE ECONOMY
For some time now, the state of the Nigerian economy has been on the front burner of national discourse. Experts in economics, international financial institutions, and rating agencies, have raised alarm on the parlous state of the economy.
Many of them have argued that the economy is drifting dangerously into a hole and needs urgent government attention. But how deep that hole is, is another matter of intense debate. As the argument rages, some experts insist that the present government is yet to come clean on the real state of the economy and is, perhaps, living in denial.
One of such experts is the immediate past Governor of the Central Bank of Nigeria, Prof. Charles Chukwuma Soludo. Several times since his exit from the apex bank, he has raised the red flag on the economy. Each time, he has warned that the nation's economy is sinking and urgently needs rescue measures, or else, in his words, 'something will give.'
Government on the other hand has dismissed such prediction, describing it as the uncharitable view of an alarmist and prophet of doom. A new phase in the raging controversy on the state of the economy was ignited, recently, by the current Minister of Finance, Mr. Olusegun Aganga, who in a newspaper interview wholly dismissed the claims and warnings of Soludo.
The minister accused the former CBN boss of leaving the economy and the banking sector in a rot, with ripple effects on share prices in the capital market. He argued that for these 'offences', Soludo ought to have spent some time in jail. Soludo, replying, accused Aganga of 'ignorance' and lying on the true state of the economy. He challenged the minister to a TV debate on the economy, an invitation the minister has since rebuffed.
We do not, however, see any justification for altercation between Aganga and Soludo. Their hot exchange of words is, to put it mildly, unnecessary. What is important is the urgent need to fix the economy. Government should address the issues raised not only by Soludo, but other knowledgeable people, and the global financial institutions and rating agencies. Needless arguments dissipate energy needed to find solutions to the problems in the economy. Castigating Soludo is not the answer. The plain truth is that the indices pointedly show that the economy is in bad shape.
The living standard of the people, which reflects the health of the economy as seen through the per capita income as well as the Gross Domestic Product (PDP); rising national debts - domestic and foreign; plummeting Foreign Direct Investment (FDI) and foreign reserves - all cast serious doubts on the health of the economy. All of these precipitate loss of confidence and discourage foreign investments without which no economy can witness any appreciable growth.
Soludo did not commit any offence by offering his advice or warning. Therefore, the issues he raised should not be dismissed. Instead, government should take them serious and do what is necessary by reinvigorating the economy, curtail reckless spending, budget deficits and excessive domestic and foreign borrowing. Sound economic management requires ability to take good advice, and separate economic issues from partisan politics.
It will serve government well if it heeds warnings from knowledgeable economists and financial experts, and not politicize them. After all, governance is a human enterprise that should be concerned with the welfare of the people and the good of the country. Government has reacted to Soludo's repeated warnings rather too harshly. Let's be real: Soludo did his best as Governor of CBN. He may have made few mistakes but, beyond doubt, he initiated some sound economic policies.
Government should be forward looking. As the head of this administration's economic management team, putting the economy on a sound footing should be the priority of the Finance Minister. He should realise that he has a lot to do to lift the economy out of the present doldrums. Let Soludo's warning, therefore, be seen as a wake-up call to the authorities to position the economy for better performance.