FG has abdicated responsibility to CBN ― Moghalu

The former deputy governor of Central Bank of Nigeria (CBN) Prof. Kingsley Moghalu on Tuesday expressed worry over the seeming abdication of responsibility of governance and development to Apex bank.

Moghalu also canvassed for the free float of the naira as a way of discouraging importation and bolstering export.

“My problem with development finance of central bank today is that the government has abdicated its responsibility for managing the economy to the central bank for the past several years.

“Central Bank has been under pressure to create all manner of funds but this doesn’t solve the problem if you don’t think strategically and structurally.

“Central bank as a monetary authority cannot solve all your economic problems.

“I think there has been too much reliance on the development finance function of the central bank.

“The central bank is being overburdened and as we have seen it cannot save the Nigerian economy.

“The impact has not been what we expect because the real structural problems of the economy are not being addressed and the central bank cannot do so”, he declared.

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Moghalu lamented that more politicians were getting access to CBN intervention funds than real business people. CBN needs to focus its interventions on grassroots entrepreneurs who will make use of the credit for what it is meant for and payback.

Manufacturing is just 10 per cent of Nigeria’s GDP while agriculture is over 30 per cent.

That tells you that the economy is still primitive because a lot of the agriculture in Nigeria is subsistence. It is not industrialised agriculture without value chains that move from planting to transportation to processing to export.

We need to flip this around such that agriculture will contribute just 10 per cent to GDP while manufacturing will move to over 30 per cent.

The 2019 presidential candidate of Young Democratic Party (YDP) then recommend that the central bank should float the naira, an advice, which he, however, noted may not be heed because “it is a controversial proposal because it is against populism.

“The economy is being managed for political popularity and not for productivity which is a problem. Your first responsibility as a leader, after security, is the economy and welfare of citizens.

“I believe that instead of pumping a lot of forexes and depleting our foreign reserves in order to maintain a certain politically acceptable value of the naira, will take us nowhere even if you continue to do it for the next 20 years. It solves nothing because it encourages imports but if you float the naira and it finds its value, what will happen is that we will begin to shift opportunity to manufacturing and export.