Economic incompetence caused recession ―Moghalu
A former Deputy Governor of the Central Bank of Nigeria, Prof. Kingsley Moghalu, has said economic incompetence led the country into recession.
Moghalu, while speaking at the annual lecture of the Chartered Institute of Bankers of Nigeria in Lagos on Thursday, said the economy was being run on an ad hoc basis and without vision or philosophy.
He said, “There was an economic crisis in 2014/2015, and the best thing the government felt they could do was to fix interest rate. That, more than anything else, led the economy into recession. This made access to foreign exchange by manufacturers hard, and made the black market boom.
“The few people who had access to the CBN got the forex and sold it in the black market for three times the normal amount. The manufacturers who needed it could not get it; hence, their production level began to drop, and they started sacking workers.”
The ex-CBN deputy governor stated that the country had become the poverty capital of the world because of its intellectually lazy citizens, adding that its current state could be described as a case of the worst coming to rule the best.
Moghalu, who announced his intentions to contest for the Presidency in the 2019 elections in February, said he would be contesting to tackle extreme poverty in the country.
He stated that Nigeria had failed to create wealth, despite being a capitalist economy.
He said many of those in charge of the country had not applied themselves intellectually enough to find the balance between the state and the market place.
Moghalu added, “There are three key requirements of successful capitalism which are property rights, innovation and capital. If we do not understand the interplay of these three factors and how essential they are to the development of the economy, then we have not started yet. National economic policies must address this relationship instead of the narrow focus we have had so far on finance.
“In Nigeria, we focus on the wrong things; that is why we have a lot of problems. Most times, the government focuses on Gross Domestic Product to determine growth, not knowing that GDP growth does not lead to economic growth.”
According to him, the main focus should be on GDP per capita, not on GDP growth.
He added that a deep and efficient financial system was crucial for economic transformation of every country.