Why govt needs to pump huge funds into the economy – Olatujoye, ex-CBN Director
By Kennedy Mbele
The clamour for payrise by the Nigeria Labour Congress, NLC, has been described as a step in the right direction by a former Director, Legal Services Department, Central Bank of Nigeria, CBN, Prince Anthony Olatujoye, who cited the biting effects of economic recession as a reason.
He also speaks on other national issues.
What are the areas which you will like the Federal Government to accord attention in order to provide relief to the biting effects recession is having on Nigerians?
No doubt, the economy of Nigeria is in recession and, to resolve the natural effects of recession, government needs to employ fiscal and monetary policies designed to expand the country’s productive capabilities and curb the effects of inflation. For instance, government should pump money into the economy so that more people can be gainfully employed. Reflating the economy can be achieved through foreign borrowing; which government intends to do by getting the Senate to approve a loan of $29.9 billion to be injected into infrastructure and funding of budget deficit.
Also, considering the responsibilities of government, banks such as Bank of Industry (BOI), Bank of Agriculture (BOA) and agencies like NIRSAL Plc and indeed Development Bank of Nigeria should provide loans to members of the public and the manufacturing sector to boost the business environment.
The CBN’s Anchor Borrowers’ Programme (ABP) in pursuance of the apex bank’s developmental functions is another platform for farmers to access loans at single interest rate.
The Federal Government should provide more infrastructure while upgrading the existing ones which will enable small and medium enterprises to easily access markets and provide needed products and services. Infrastructure such as electricity, road, airport, water systems etc. are the foundations of modern economies. A combination of all these have a huge multiplier effect and can assist in attracting Foreign Direct Investment (FDI) and Diaspora Funds into the economy.
How do you assess the efforts by the Federal Government to revive the economy? Are the right steps being taken?
The efforts of government, particularly with respect to electricity generation, especially with the Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola SAN, going round the country to ensure that Distribution Companies (DISCOS) provide adequate services, is highly commendable. The encouragement of synergy between the Federal Government and the private sector to look into areas where government can leverage on to revamp the economy is a step in the right direction. Also, the collaboration by the government’s economic team headed by Vice President Yemi Osinbajo SAN, with members of the private sector in formulating policies and strategies for revamping the economy is encouraging. We also have to mention the efforts of the Agriculture Minister, Chief Audu Ogbeh, who is passionately putting all efforts to revamp the agriculture value -chain.
What is your view on the proposed 30 billion dollars loan the Federal Government wants to take?
I have no objection to this as borrowing is a means of reflating the economy. This is because the funds required for boosting the economy is usually obtainable externally where there is a dearth of domestic fund and this will help government to tackle the effects of recession. It is a step in the right direction as the economy should be reflated with such fund since the usual sources of budget funding for the government, i.e. income from the non-oil sector and funds from the oil sector, are inadequate. Another factor is the effect of pipeline vandalization in the South-South which has adversely affected government revenue, hence, the necessity to look outward for funds.
Some Nigerians have accused the Federal Government of concentrating too much attention on the fight against corruption to the neglect of other sectors, do you agree with such views?
I do not share that belief .We should all remember that corruption has become a big problem to this nation, and it appears Buhari’s administration is determined to take the bull by the horn, and that’s why it appears as if too much attention is being paid to the fight against corruption. The Federal Government has been doing well in other areas especially in the war against insurgency. This government should be commended for the near decimation of Boko-Haram. The current peace initiative in the Niger Delta also deserves commendation.
What steps should be taken to attract foreign investors into the country?
Guaranteeing peace and stability is a condition precedent to attracting foreign investors into Nigeria. Infrastructural development, embedded in increased public and private partnership (PPP) is sine-qua-non for a virile/enabling environment for good business.
The laws relating to investment, like the Companies and Allied Matters Act, Investment and Securities Act, e.tc should not be too stringent while the incorporation of companies should be more convenient using information technology.
Also, government at all levels, should look into the issue of double taxation in respect of investments and businesses in Nigeria as same must be discouraged.
The role of the judiciary in speedily resolving investment dispute cannot be over-emphasized. Also, more incentives for investment should be given to foreigners, though not to the detriment of local industries so as not to stifle competition.
Access to forex should be eased to attract foreign investors. Particularly, there should be a uniform exchange rate for forex at the banks, the bureau de change and even the black market; it is noteworthy that the Minister of Finance, Mrs Kemi Adeosun, is currently pushing for a single exchange rate.
The Central Bank should also be encouraged to lower its MPR (Monetary Policy Rate) to encourage borrowing by foreign and local investors.
The issue of unpaid salaries of workers, how can it be resolved?
Revamping the economy can be done by giving a level of autonomy to states to tap the resources located in their areas. This is a kind of fiscal autonomy and economic restructuring which would drastically improve their IGR (Internally Generated Revenue).
For the oil producing states, allocations may be increased and for the non-oil producing states, more opportunities should be given to them to exploit the resources in their areas so as to get sufficient fund to pay salaries of their staff and develop infrastructure.
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