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OPEYEMI AGBAJE: “IF ONLY WE ACT LIKE A RATIONAL ECONOMY…”

(Last Updated On: March 7, 2017)

 

By James Michael Igiri

The Liberal Forum, Nigeria has resolved that a more holistic alternative economic plan and an aggressively altruistic implementation approach, is the only panacea for evolving a greater economic development that would lift the poor from their present economic quagmire to a more enviable status.

This resolution was made at the 2nd edition of NUESA economic discourse which held at Afe Babalola Lecture Theatre of the University of Lagos on Tuesday 7th March, 2017.

In his address, the keynote speaker at the event, Mr. Opeyemi Agbaje while presenting a lecture on the theme; ‘Nigeria Economy: Lessons in Pain’, opined that the Nigeria system- political, economic, and social- has not helped , and so the nation is plagued with a lot of very poor people.

“There are four institutional problems I see with the Nigerian economy that keep the poor down, these include: wrong budgeting priorities- where the national budget for a long time has hovered around 70% on recurrent expenditure alone; earnings from crude oil in the last years have been wrongly spent; wrong financial systems- which leaves the population at the mercy of the commercial banks, and a gross neglect/ lack of investments in viable sectors like agriculture and manufacturing.”

Tracing Nigeria’s historical and economic trajectory, the CEO, RTC Advisory services observed that in the years preceding 2014 (with a poverty rate of 72%), that is, 1980; 1985; and 1995 poverty levels in Nigeria has increased geometrically from 27.2%, 46.3%, and up to 60% respectively. He then predicted that if updates are done within this period of inflation, the overall poverty level would be hovering around 85%. This, he blamed on bad economic policies, and a gross mismanagement on the part of government and its paraphernalia.

“I was born in an era where the entire geographical area called Nigeria was divided, and administered regionally; and this, as we now know produced some considerable achievements that far outranks those of this era.

What we now have is an overwhelmingly large, over bloated, wasteful, and deceitful federating unit system which is largely nothing more than an instrument for the distribution of the ‘national cake’. Another cause of endemic poverty is lack of sustained industrialisation, occasioned by inadequacies in the power and the transport sectors.

Also, deficiencies in social services such as education and public health services as well as poor policies and implementation failures are contributing factors responsible for the deplorable state we have found ourselves today.”

Mr. Agbaje explained that if only we had acted like a rational economy, things would have panned out differently, but a foreign exchange policy which saw the federal government initiating varying exchange rates for different categories of Nigerians- for instance, 197 naira for pilgrims to the holy lands, and about 300 naira at the interbank market- was quintessential of some of the wrong policies embarked upon by government in a bid to halt the free-fall of the Naira against other international currencies in 2016.

The consequence of which, according to him, was a cunningly dubious approach by money dealers who then leveraged on the policy to obtain cheaper Dollar(s) which they then exchanged at a parallel black market for a higher price of up to 500 naira.

“Today, our inflation rate is double digits, hovering around 18.6% and above. The moral of this story is that we must approach economic policies rationally and not emotionally. Our GDP needs further optimisation; government must address the issue of downstream petroleum sector; and we need budgetary reforms to concentrate on capital expenditure.

“I hope that politicians and labour leaders will allow the privatisation of our refineries; devolution of powers to other federating entities; focus on MSMSEs; and our leaders must engender greater national security through the abolition of institutional corruption because that is what the 1999 constitution expects them to uphold,” He said.

Earlier, the Acting HOD, Department of Economics, University of Lagos, Dr. Olukemi Lawanson in her opening remarks spoke on why Nigeria has not been able to keep her inflation rate within a one digit figure like some other African countries- Cameroon 2.5%; and Kenya at about 6.2%.

“The problem with Nigeria is not in policy formulation, but in its implementation. My belief is that this event will open up some of these issues through a robust discussion; and that through this, viable policy frameworks would be made to address the myriad problems we face as a nation.”

Other presentations were made, with various panels discussing issues of the economy including Nigeria’s position in the 4th Industrial revolution; a cure for economic malaise; and the welfare state of Nigeria.

The academic conference was jointly organised by the Nigerian Universities Education Students Association (NUESA), and The Liberal Forum- a non-partisan economic and corporate think-tank group dedicated to addressing contemporary economic issues in Nigeria; and was supported by OLX, a global online marketplace.