Group Managing Director, TL First Consult Dr. Olu Olasode has attributed the economic challenges bedevilling the nation to the inconsistent policies adopted by the Buhari led administration.
The renowned economist, who stated this during an interview with Nigerian Pilot yesterday in Abuja, noted that the fight against corruption alone will not grow the economy thus, stressing the need for the government to stimulate economic activities for national development.
Olasode further highlighted inconsistent policies adopted by this administration as the key challenge for what have befallen our nation’s economy such as the devaluing of naira, the dual exchange rate and so on.
According to him, “We have much inconsistent policy that we have adopted. For many years, we’ve been battling whether or not it is proper to devalue naira and we vowed not to devalue it, however in principle naira has been devalued years back because we allowed the parallel market to run and actually that parallel market is trading in volume as much or almost more than we are trading in the official rate and that is really official unofficial rate”
He added that, “the recent decision to try and realign the official rate with the parallel market is a step but in any sustainable environment you can’t have such a big cap between two markets especially where the government by its own policy has allowed people to operate in that secondary market by registering them”.
The expert said the government is pushing a lot of people especially those that are into manufacturing to get the forex from the secondary market by saying you can go and get forex elsewhere, we are not going to sell to you, it is another way of saying that the secondary market is also recognised as an official market.
“On the long term, dual exchange rate is not desirable unless the margin between the two markets is very small. We can’t have a dual market with such a gap that we have here.
“It will create room for people buying from one market and selling it at another market. You will give opportunity to some people to purchase dollars in low rate and selling it at a higher rate. The duality of exchange rate will create a room for that to happen.” He said
He convincingly noted that fighting corruption will only try to block leakages hence, help in directing funds into the right place but not in any way grow the economy.
“Economies don’t grow because you moderate extant market, economies don’t grow because you say you want to tackle corruption. Those things don’t grow economy.
“Tackling corruption is a way to block leakages but it doesn’t grow an economy, it only helps you to direct funds into the right places.
“Economies grow because you stimulate economic activities and in the small pockets of different activities things begin to happen.”He said
Speaking further, he elucidated that the current economic challenges faced in the country is unconnected to the late appropriation of the 2016 budget stressing that the government activities itself were been limited by the timing release of funds.
“This starts with budget for 2016, signed off mid-year, appropriated and released in the second half of the year, so when the government activities itself has been limited by the timing release of funds then you haven’t even stimulated anything.
“The government said last year that they are going to correct that this year that the budget release would be done early but if you look at the timetable published around June this year for next year’s appropriation, you will see that we are already behind. This is September, we should have started budget defence. October it should get to the National Assembly and then be passed before January.” Said Olasode

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