Tinubu advises FG on economic growth strategies

NATIONAL Leader of the All Progressives Congress (APC) and former governor of Lagos State, Asiwaju Bola Ahmed Tinubu has suggested ways through which the Federal Government (FG) could bring about economic growth in the country.

This is even as he warned that the end of economic recession does not indicate economic prosperity.

He spoke on Tuesday, while delivering a keynote address at the 91st anniversary of The Daily Times newspapers in Abuja.

Tinubu, who was represented by the Osun State Governor, Rauf Aregbesola, stressed the need for a holistic reform of Nigeria’s economy as a way of bridging the gap of poverty in the country.

“Our economy has been one where too many people and resources were left idle and thus made poor by virtue of this static predicament. Joblessness or poverty became the byword describing the lives of most people. The industrial base we were developing vanished under a torrent of imported goods.

“Government correctly seeks fiscal stimulus to energise the limping economy. One can argue that efforts in this direction are perhaps too modest given the situation that confronts us.”

He commended recent efforts made by the Central Bank of Nigeria ( CBN) as well as other stakeholders in stabilizing the economy but added that there was need to do more.

“Our monetary authorities have done better recently, but they need to take additional steps to increase the fiscal space available to government and the private sector.

“I endorse analysis of Governor Akinwunmi Ambode and others that current interest rate levels bridle growth by making borrowing for long-term investment too costly.

“Monetary authorities appear to be more concerned with battling inflation than in sparking growth. However, the nature of our inflation – mainly cost driven – is beyond the purview of interest rate policy to contain.

“Instead of surrendering growth to curb inflation, current policy sacrifices both. Also, the varying exchange rates distort economic and monetary signals. The vast rate differentials is fertile ground for currency arbitrage and speculation. This means that too much money will chase rentier opportunities in the financial sector instead of being plowed into vital investment in the jobs and equipment needed for the production of actual goods,” he said.

He further pointed that Nigeria still operate under an implicit dollar standard which according to him had been discarded 40 years ago.

The former governor suggested that for the country’s economy to grow marginally, budgetary calculations should be based on the quantity of Naira and not dollar.

“More fundamentally, we need to break from the self-imposed dollarization of our fiscal space. The intake of dollars determines our budgets. We operate under an implicit dollar standard. However, the global dollar standard was formally abandoned over 40 years ago.

“Instead of this outdated mechanism, we should base our budgetary calculations on the quantity of naira needed to foster the highest growth possible without pushing inflation too high.

“Such a change in perspective will remove the ideological blinders that thus far have impeded our ability to define our political economy and its path to growth.

“It also will open the fiscal space so that government can undertake even greater steps to stimulate the real economy in ways that provides jobs and builds the infrastructure needed for sustained economic development.”

Tinubu also blamed the current woes of the country on political economy saying; “Nigeria is at a juncture where it must redefine itself or forever forfeit the right of way to a better future. The primary challenge of our time is our political economy.”

He said: “The slump in oil prices exposed the weakness of our economy for even the blind to see. The truth be told, we always knew this weakness existed. Yet we did nothing to cure it when fixing the gap would have been less painful and less urgent.

“Through indifference, selfishness or ignorance, we failed to forge a consensus on how to resolve the collective problem. This failure speaks to a problem of our politics because the decision on how to structure the economy is essentially political in nature.

“For all the energy invested in politics, the output has been minimal. In short, our politics has been directed at the wrong things. Because of this, Nigeria has too long travelled a self-defeating economic road.

“Dare not think that we can afford to sit idly and outwait the low oil prices. We cannot fool ourselves into believing that the prices will rebound to prior levels and things will return to normal.”