Nigeria’s economy has been adjudged as one of the poorest economies in the world because of the high inflation it is experiencing which is caused by corruption and Naira devaluation.
There is, therefore, a need for forward thinking reforms and policies to make the nations economy a thriving one.
A former deputy governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has suggested that the government needed to support foreign exchange reform policies with trade reform policies.
According to him, the new policies by President Bola Ahmed Tinubu are “necessary but difficult”.
Read Also: Subsidy Removal: See What Moghalu Feels About It
Long Overdue Policies
These policies should have been adopted many years ago by previous administrations.
However, the economist, offered some words of caution.
In his words: “It’s important that we are not carried away by the joy of foreign investors.
“An economy is supposed to sell its people’s potential and capacity, he said.
“And the reality is that the people of Nigeria have suffered greatly because the cost of living has risen far beyond their means so the government cannot move fast enough.
“For example, on the matter of the new minimum wage the government should make effort to address it with alacrity.
“They should be addressed with the same determination we have seen in some other directions”.
Moghalu also noted that “the reforms are moving in the right direction and there are structural bottlenecks that must be opened”.
Cushion Adverse Effect On Citizens
The former CBN deputy governor, explained that the reforms were the beginning of a series of reforms that have to take place in the Nigerian economy.
According to him, it is necessary to mitigate the shock and adverse effects on the country’s citizens.
he recommends that the government should support foreign exchange reform policies with trade reform policies.
Moghalu stressed that the government should explore strategies to establish a thriving economy with a more favorable naira exchange rate in the global market.
“Nigerians don’t understand that the CBN doesn’t operate like a commercial bank. It’s not after deposits.
“We have the concept of what we call the impossible trinity.
“We cannot have a fixed exchange rate, an independent monetary policy, and a free float of capital all at the same time. You have to make a choice,” he said.
Read Also: Banking Sector: Moghalu Speaks On How Banks Can Become Stable
CBN Contributed To High Inflation
Moghalu said, the apex bank contributed to Nigeria’s high inflation figure through illegal financing of the Federal government’s massive deficits.
“The central bank itself was contributing to inflation through the monetary phenomenon of illegal financing of the Federal government’s massive deficits to the tune of ₦23 trillion, in ways and means lending.
“You’re contributing to inflation with one hand, but you say you’re fighting inflation with the other hand.
“Why were the ways and means lending so high?
“It is because you have a government that could not manage its fiscal books,” Moghalu said.
