Sunday Okobi and Aliogo Ugochukwu A former President of the Nigerian Bar Association (NBA) President, Mr. Olisa Agbakoba, has posited that it is evident that the oil price shock contributed mainly to the downward spiral in the economy which resulted in the present recession. According to him, the first step to take in any ailing economy is to diagnose the problem, adding that “in Nigeria’s case, I would diagnose that it is suffering from malignant metabolic economic syndrome, complicated by inflation, high interest rates, unemployment, weak infrastructure and the results of the global fall in the price of oil.” In a statement he signed and issued to journalists yesterday, the Senior Advocate of Nigeria painted a gloomy picture of the country’s economic situation which he said if not treated with urgency by introducing strong fiscal, trade and monetary policy could lead to depression.Agbakoba noted in the statement that “We know that Nigeria has experienced mismanagement for several decades but now is not the time to lament but to chart a clear economic policy direction that will give value to the economy. This will entail developing macroeconomic models tailored to stimulate all sectors of the economy and catapulting us out of recession. “On the issue of monetary policy, there is a lot of confusion. There is the need for harmonisation between Central Bank of Nigeria (CBN) policy which is leaning towards tight liquidity in a bid to harness inflation and the Minister of Finance call for increased public spending on capital projects.” He noted that that CBN has increased the Monetary Policy Rate (MPR) by 200 basis points from 12 per cent to 14 per cent to combat inflation and stimulate growth. “The MPR is the anchor rate at which the CBN, in performing its role as lender of last resort, lends to deposit banks to boost the level of liquidity in the banking system. If the apex bank intends to increase the level of liquidity in the economy, it reduces the MPR but increases it when it intends to tighten money supply. “By increasing MPR, CBN has unfortunately tightened lending. The banking sector requires strengthening and must be empowered to lend. I recommend that money from the Treasury Single Account (TSA) should go back to the banks at single digit rates and that banks’ recommended lending rate should not exceed 5 percent,” he said. In his analysis, he suggested that the CBN should focus on productive value of the economy and not the numerical value of the naira, adding that: “The recent devaluation of the naira by the introduction of a floating naira exchange rate has not yielded positive results as we see the naira spiraling downwards. In fact the new forex regime caused a drop in the GDP from $ 500billion to some $350billion by reducing per capita income to below $600.” While proffering solution to the biting situation, he said: “I feel that government’s monetary policy will be required to move from strict monetarism of the Milton Friedman School of thought to the Keynesian Model. Milton Friedman promoted an alternative macroeconomic viewpoint known as ‘monetarism’, and argued that a steady, small expansion of the money supply was the preferred policy. His ideas concerning monetary policy, taxation, privatization and deregulation influenced government policies, especially during the 1980s. “I believe strongly that Nigeria can recover from recession and I recommend as a start the need for a Presidential Proclamation at the National Assembly, switching from Austerity Policy to Growth Policy, this will instill hope and form the basis for the way forward. I am not sure if the Economic Emergency Powers requested by the President Muhammadu Buhari would work. I recall that President Shagari had them and failed; the Venezuelan model has also not worked. To boost the economy will require massive spending on infrastructure and public works which will also require manpower resources.” On the need for huge stimuli for business growth, he said there will be the need to create a debt factor market to soak up non-performing loans presently on the banks’ balance sheets now standing at about N20trillion. “Also, medium and small businesses must be encouraged and enabled to access funds to grow their businesses as these businesses represent the engine of economic growth,”# he stated.*

Hi babies!

Nigerian will enter into ECONOMIC DEPRESSION in the next 6months, if nothing meaningful is done now.

dave26c:
Sunday Okobi and Aliogo
Ugochukwu
A former President of the
Nigerian Bar Association
(NBA) President, Mr. Olisa
Agbakoba, has posited that it
is evident that the oil price
shock contributed mainly to
the downward spiral in the
economy which resulted in
the present recession.
According to him, the first
step to take in any ailing
economy is to diagnose the
problem, adding that “in
Nigeria’s case, I would
diagnose that it is suffering
from malignant metabolic
economic syndrome,
complicated by inflation, high
interest rates,
unemployment, weak
infrastructure and the
results of the global fall in
the price of oil.”
In a statement he signed and
issued to journalists
yesterday, the Senior
Advocate of Nigeria painted
a gloomy picture of the
country’s economic situation
which he said if not treated
with urgency by introducing
strong fiscal, trade and
monetary policy could lead to
depression.Agbakoba noted in the
statement that “We know
that Nigeria has experienced
mismanagement for several
decades but now is not the
time to lament but to chart a
clear economic policy
direction that will give value
to the economy. This will
entail developing
macroeconomic models
tailored to stimulate all
sectors of the economy and
catapulting us out of
recession.
“On the issue of monetary
policy, there is a lot of
confusion. There is the need
for harmonisation between
Central Bank of Nigeria (CBN)
policy which is leaning
towards tight liquidity in a bid
to harness inflation and the
Minister of Finance call for
increased public spending on
capital projects.”
He noted that that CBN has
increased the Monetary
Policy Rate (MPR) by 200
basis points from 12 per cent
to 14 per cent to combat
inflation and stimulate
growth.
“The MPR is the anchor rate
at which the CBN, in
performing its role as lender
of last resort, lends to
deposit banks to boost the
level of liquidity in the
banking system. If the apex
bank intends to increase the
level of liquidity in the
economy, it reduces the MPR
but increases it when it
intends to tighten money
supply.
“By increasing MPR, CBN has
unfortunately tightened
lending. The banking sector
requires strengthening and
must be empowered to lend. I
recommend that money from
the Treasury Single Account
(TSA) should go back to the
banks at single digit rates
and that banks’
recommended lending rate
should not exceed 5
percent,” he said.
In his analysis, he
suggested that the CBN
should focus on productive
value of the economy and
not the numerical value of
the naira, adding that: “The
recent devaluation of the
naira by the introduction of a
floating naira exchange rate
has not yielded positive
results as we see the naira
spiraling downwards. In fact
the new forex regime caused
a drop in the GDP from $
500billion to some $350billion
by reducing per capita
income to below $600.”
While proffering solution to
the biting situation, he said:
“I feel that government’s
monetary policy will be
required to move from strict
monetarism of the Milton
Friedman School of thought
to the Keynesian Model.
Milton Friedman promoted an
alternative macroeconomic
viewpoint known as
‘monetarism’, and argued
that a steady, small
expansion of the money
supply was the preferred
policy. His ideas concerning
monetary policy, taxation,
privatization and
deregulation influenced
government policies,
especially during the 1980s.
“I believe strongly that
Nigeria can recover from
recession and I recommend
as a start the need for a
Presidential Proclamation at
the National Assembly,
switching from Austerity
Policy to Growth Policy, this
will instill hope and form the
basis for the way forward. I
am not sure if the Economic
Emergency Powers
requested by the President
Muhammadu Buhari would
work. I recall that President
Shagari had them and failed;
the Venezuelan model has
also not worked. To boost
the economy will require
massive spending on
infrastructure and public
works which will also require
manpower resources.”
On the need for huge stimuli
for business growth, he said
there will be the need to
create a debt factor market
to soak up non-performing
loans presently on the
banks’ balance sheets now
standing at about N20trillion.
“Also, medium and small
businesses must be
encouraged and enabled to
access funds to grow their
businesses as these
businesses represent the
engine of economic growth,”#
he stated.*

test