Wed Dec, 08 2010
Unless the Federal Government puts the brakes on its current policy of uncontrolled spending spree, the nation risks going broke sooner than envisaged, former Vice President and presidential aspirant of the Peoples Democratic Party (PDP), has warned.
According to a statement by the Atiku Abubakar Campaign Organisation, the former Vice President had severally alerted on the parlous state of the nation’s economy. Similarly, Managing Director of the World Bank, Dr. Ngozi Okonjo-Iweala and the former Governor of Central Bank of Nigeria, Prof Chukwuma Soludo and the Brettonwood institutions have also urged urgent interventions to stem the slide of the economy.
But rather than take heed of the alerts, the Jonathan administration has continued to play the ostrich and live in denial of the true state of the Nigerian economy.
The PDP presidential aspirant warned yesterday that unless the uncontrolled spending and mismanagement of the economy by the Jonathan administration is checked, the nation risks going broke sooner than later.
He noted that the Minister of Finance, Dr. Segun Aganga and Governor of CBN, Lamido Sanusi Lamido have acknowledged that that indeed all is not well with the nation’s economy.
He said that with inflation currently at 14% in Nigeria compared to the BRIC countries’ (Brazil, Russia, India, and China) 7-8% and sub-Saharan Africa’s around 7%, Nigeria may not attain the 2020 target of being one of the leading 20 economies.
Atiku noted that the current situation is also being exacerbated by the rapid depletion of the external reserves with not much to show for it in terms of infrastructure and economic development.
He dismissed the claim of Aganga that Nigeria is currently one of the top 10 economies of the world as reminiscent of George Orwell’s Animal Farm in which presumed economic growth is only visible from pronouncements of government officials.
He said that in the first 8 months of this year alone, the foreign reserves have gone down by $8 billion with its attendant impact on rising inflation.
He noted that the CBN’s intervention in raising the MRR (minimum rediscount rate) by 25 basis points has not helped the situation adding that since rates were raised, another $2.7 billion have gone from the reserves.
The PDP presidential aspirant said that even most worrisome is the depletion of the Excess Crude Account from $22 billion to $470 million with no corresponding projects associated with the spending. He regretted that most of the expenditure has gone into recurrent spending.
According to him, the fact that the Jonathan administration is relapsing into the habit of foreign borrowing is a clear indication that something is wrong with the way the economy is being run.
He said as desirable as borrowing is to the development of the economy, the funds so borrowed must be targeted at critical sectors, else the nation would be returning to a regime of debt overhang.
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