A former Deputy Governor of the Central Bank of Nigeria (CBN), Professor Kingsley Moghalu, has revealed those who destroyed the Nigerian economy.
Moghalu, who was a guest on ARISE News on Monday, said some highly influential persons, politically connected individuals, and politicians are responsible for the collapse of the country’s economy.
The former presidential candidate opined that Nigeria’s politics is driven by a greed for power at the centre for the purposes of rent-seeking. He added that there is a lot of rent-seeking concerning the Naira.
Moghalu said: “If you keep the Naira subsidised if you create different exchange rates for different types of businesses for the Naira, you are not creating a level playing field in the financial market.
“And there are people who profit from these arbitrage opportunities, and many of them are powerful, politically connected people who have a very important influence on political decision making which of course influences economic decision making. So our economy is suffering because of our politics.”
Speaking further, Moghalu noted that the country’s currency keeps falling in value because handlers of the Nigerian economy is pursuing an economic policy that is not grounded in any clear philosophy.
He said: “The Naira keeps falling in value because we are pursuing an economic policy that is not grounded in any clear philosophy. We have not yet been able to get right the balance between the state and the market place in Nigeria, and that is why despite Nigeria crawling with brilliant economists, our economy keeps going backwards.”
“The Naira’s problem is that the central bank is trying to control the price of the Naira in the market and it is subsidising, in fact, the Naira is on steroids from forex interventions in the banks and this is bringing down our foreign reserves level significantly.
“When the market itself perceives that the actual value of the currency vis a vis foreign currencies is subsidised, a massive parallel market will naturally develop and investors will have hesitation in investing in the Nigerian economy and there will, in fact, be a lot of capital flight.
“I have advocated that the Naira should be valued on the basis of a market-determined flexible exchange rate, you can put in a very simple way, float the Naira. It’s a controversial proposition, but I say that it is better than what we are going through and it will yield results that are positive for Nigeria if it is planned properly and executed properly.
“You do not just continue to devalue the Naira without reforming trade policies. You have to float the Naira to create an incentive for exports to earn foreign exchange, right now so long as the Naira continues to be subsidised, you are creating an incentive for an import-dependent economy which is what Nigeria has been for the past 50-years.”