Foremost economist, Mr Henry Boyo, lamented the country’s huge debt profile estimated at N6.6trn saying that it might take about three generations to pay off the debt.
Mr Boyo spoke at a roundtable dialogue to mark the first anniversary of Occupy Nigeria protest with the theme, “Nigeria’s fiscal and monetary crisis: the way forward”, in Lagos.
According to Boyo, “It will take the Federal Government a little over 70 years to be able to repay its official debt which presently stands at N6.6trn.”
He also disagreed with officials of the Central Bank of Nigeria, CBN over monetary policies such as inflation rate, management of excess liquidity and other issues affecting the economy and went as far as accusing the CBN of not taking the necessary steps to galvanize the economy.
Even as the apex bank claimed that it was doing all within its power to regulate the economy, Boyo listed high interest rates, depreciating naira, high rate of smuggling and capital flight, low capacity utilization and inadequate power as factors responsible for the dwindling state of the economy.
“We have a total of N6.6trn as debt and you must know that this will be paid by our generations yet unborn. No economy can grow with all these factors. All these factors I have mentioned are triggered by poor framework and responsible for the state of our economy. The CBN is also not doing enough to galvanize the economy,” he said.
On their part, the CBN team led by its Director of Research, Mr Charles Mordi; Director of Financial Markets, Mr Emma Ukeje and Director of Communications, Mr Ugochukwu Okorafo, in their defence, said the apex bank had been in the lead to ensure that the inflation rate in the country was reduced to its barest minimum.
Mordi said that the Central Bank recognized that inflation could be damaging to the economy, adding that the CBN has shown initiative to reduce it to the barest minimum
“What people do not understand is that you don’t suddenly reduce inflation from twelve per cent to say, two, three per cent. Reducing inflation takes a gradual process. Bringing down interest rates cannot be done overnight,” he said.
Speaking in response to Boyo’s presentation, Mordi said the CBN was not in disagreement over the issue of achieving a single-digit interest and inflation rate regime in the country.
He stated that as a result of the desire to see that objectivity comes to pass, the CBN has introduced several intervention packages in various sectors of the economy.
He however said that it would be difficult to achieve single digit inflation and interest rates and still have a strong naira considering the fact that interest rate is a function of demand and supply.
He maintained that achieving a single digit interest rate and inflation rate at the same time having a strong naira was a wide dream, saying that one has to be used to balance the remaining two.
“We have always insisted that a low interest rate regime is desirable; that is why we are working hard to ensure that loans are given to the agricultural sector at a single digit interest rate,” he said,
He added that the CBN having recognized the damage a high inflation rate posed to the economy, recommended in 2007 that the Federal Government convert the allocation of states into dollars, but this was met with opposition from the Attorney-General who said it was unconstitutional.
“For developed economies, two to three percent inflation rate is the norm, but for an emerging economy like Nigeria, this is not the norm.”
On his part, Dr Dele Sobowale, who spoke on Nigeria’s fiscal crisis blamed the Federal Government of responsibility for the dwindling fortunes of the Nigerian economy.
He said, “The economy of Nigeria will get nowhere until we muscle the big thieves.”
He also faulted the method 0f monthly revenue sharing between the three tiers of government, saying that it defeated the idea of federalism.
“There is no country in the world where all the three tiers of government share money, especially their monthly revenue. When there was true federalism, each region developed at its own pace and remitted certain percentage of its revenue to the centre. We must understand that fiscal policy remains the bedrock of any economy.”
Earlier in his welcome address, the convener of the Save Nigeria Group, organizers of the roundtable dialogue, threw a dare at the Federal Government to increase the pump price of fuel, saying the Occupy Nigeria protest on the increase of fuel price still haunts government.
Bakare said that by that protest held in January 2012, Nigerians had shown they would no longer be taken for granted.
“In the period after the protests, many have asked the question: what did we gain from standing under the sun for days listening to address after address and singing song after song? Quite a lot, actually. First, we were able to shed the toga of docility that encouraged the rulers of Nigeria to assume they could act on every whim and go scot-free.
“They had concluded that Nigerians live from hand to mouth each day, and as such, would be too distracted by the hunger pangs of subsistence living to engage in a protracted battle to crush oppression. That myth was shattered forever at Ojota, as it took illegal military occupation to stop the protests from continuing the following week.
“We are currently challenging that violation of the right to peaceful assembly guaranteed by our Constitution at the Federal High Court. In addition, the government has not had the courage to officially raise the pump price post-Occupy Nigeria because the ghost of the protest still haunts them.”
He said even though the protest did not lead to uprising in the country, it succeeded in exposing the “underbelly of corruption as did the Farouk Lawan and Ribadu committees which were offshoots.” He said the Occupy Nigeria protest has produced enough literature on what he called “the big business of corruption that has turned a country with one of the largest oil deposits in the world to one that depends on expensive and low quality imported petroleum products for its domestic consumption.”
He said, “Our movement did not bring about change on the scale of Tunisia, Egypt, Libya et al. the subsidy thieves are still kings with all the perks of office, and corruption in the industry still thrives as our people pay more than the official pump price in many filling stations. In spite of all these, we must not despise the compact that was laid and upon which we must continue.
“Nigeria cannot make progress for as long as we disregard the rule of law, promote inequity and lock political institutions that allow the people to elect their representatives and reject them if need be. We have another prime opportunity to rededicate ourselves to the noble goal of saving Nigeria, changing Nigeria and making Nigeria great in our lifetime.”