BEVERLY HILLS, April 24, (THEWILL) – Erstwhile governor of the Central Bank of Nigeria, CBN, Prof. Chukwuma Soludo, on Monday posited that the country would get out of the current economic recession inspite of the policies of government.
This was as he argued that getting the country out of the current recession is no big deal compared to bringing the economy back to the path of growth.
“The recession is not the issue. We will get out of it in spite of government policy,” he said in a interview with journalists after chairing the Economic Discourse organised by the Institute of Chartered Accountants of Nigeria, ICAN, in Lagos.
The former CBN governor harped on the need for policymakers to get the country out of the current multiple exchange rates’ regime and reduce the wide gap between the official and parallel market exchange rates of the naira to a maximum of three to five per cent.
Highlighting steps that need to be taken by the Federal Government to return the country from the biting economic challenges to the path of growth, he challenged policymakers to take bold steps that would navigate the country away from crude oil dependency to a non-oil economy on the long run.
Soludo commended the steps taken by the CBN in the past few weeks to restructure the foreign exchange market, but insisted that there was still a long way to go to get the economic back on track.
“With regards to exchange rate, I can see quite some changes in the last few weeks. I think some steps are beginning to be taken, but it is still quite a long way to go to get to a stable and predictable level that eliminates the premium among the multiplicity of exchange rates.
“Nigeria must get out of multiple exchange rates and we must eliminate the premium, get it back on track at a competitive exchange rate regime. The uncertainty that is created by that is so enormous; and with the oil price rising and with the increase in oil earnings, this is the time to take bold steps and do the needful,” the ex-CBN governor said.
While disclosing how policymakers can eliminate the multiple exchange rates, he said, “On bold steps, the template is not too far. We have done it before and it is just going back to it. If it (the template) is not broken, why mend it? Get back and eliminate the multiple exchange rate regime, eliminate the premium, or at least significantly reduce it to not more than between three to maximum of five per cent premium between the parallel and official exchange rates.
“On what it takes to do it, that is basically known. Get the public finance okay; I can tell you that with the momentum of what is going on in the rest of the world, by the end of this year, we should actually be having stocks of reserves in the range of about $50bn or $60bn.”
“I think this is a time Nigeria should actually be making hard decisions to transit away from an oil revenue economy. And that’s the serious work,” the former CBN boss added.
Source: The Will