No Quick Solution to Nigeria’s Economic Woes – Adeosun

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Adeosun

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FOLLOWING criticisms by Oby Ezekwesili, former minister of education that President Muhammadu Buhari’s economic policies were archaic, Kemi Adeosun, minister of finance, has said that there were no quick solutions to the nation’s problems. She dismissed Ezekwesili’s position, maintaining that the federal government had plans to revitalise the economy.

Adeosun, who spoke on Channels Television programme, Sunrise Daily, on Thursday, May 5, accused previous administrations of failing to save when the country had massive revenue from high crude oil prices. The minister said things were currently difficult because the federal government inherited an empty treasury and a high debt profile. She said: “I disagree with Mrs Ezekwesili. The present government does not operate a command-and-control economic system as alleged by the former minister.

“What we are now trying to do is reset the economy so that we never end up in this situation again; and how do we do that? We have to have a more diversified economy, a more diversified revenue base. If you look at oil, its only 13 percent of our GDP but it represents 70 percent of government’s revenue, which means if anything happens to oil, it affects everybody.

“The question we are trying to now resolve is: The remaining 87 percent of GDP, why is it contributing so little to government’s revenue? If we are able to have those other revenues, which are much more stable, predictable and less volatile, then if the oil price goes down, we’ll be able to maintain some level of stability. We have looked at what government has been spending money on; only 10 percent was spent on capital, while 90 percent was spent on recurrent items as salaries, travelling, training and so on and those things don’t grow the economy; capital (expenditure) is what grows your economy.

“This budget that is being finalised has a 30 percent commitment to capital and we have said we want to maintain that commitment. There are no quick solutions to the current economic woes. We are going to pump N350 billion into the economy until we see growth. The job will be done painstakingly, and we will come out of it better.”

Ezekwesili had on Saturday, April 30, said President Buhari’s current economic policies are similar to those he promulgated during the military regime he led in the 1980s. Speaking as a guest on Platform, a programme organised by The Covenant Christian Centre in Abuja, she advised the President to review his policies, saying they were not benefitting the masses.

“During the first coming of this our new president, a command and control economic system was adopted. During that era, inflation spiralled. During that era, jobs were lost. During that era, the economic growth level dipped. That era wasn’t the best of eras in economic progress. What did not work in 1984 cannot possibly be a solution in a global economy that’s much more integrated,” she said.

Ezekwesili said Buhari was rehashing the same command and control approach towards economic issues which has left the country’s economic indices worse off since he assumed office almost year ago. “In over one year, the president is still holding to the premise that command and control is the only way out. In a year we have lost the single digits inflation status we maintained in past administrations.”

According to her, Buhari’s distortion of foreign exchange system has left the poor it was intended to support even worse off. “The president comes into this economic philosophy on the premise that he does not want the poor to suffer. I can relate to that, a leader must not allow the poor to suffer, especially a leader who knows that most of his votes came not from the elite but from the poor. The problem though is that the intention and the outcome are diverged. The weakest and the most vulnerable suffer the impact of inflation the most. Enormous power is being abused as a result of opaque economic policies. Companies are suddenly finding themselves unable to produce because they’re unable to access foreign exchange,” Ezekwesili said.

—  May 16, 2016 @ 01:00 GMT

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