By Paul Obi, Abuja
As Nigeria continues to battle with a crippling economic recession, the national leader of the All Progressives Congress (APC) and former Governor of Lagos State, Asiwaju Bola Ahmed Tinubu, on Wednesday criticised the monetary policy of the President Muhammadu Buhari administration.
Speaking as a guest speaker at the National Defence College in Abuja with the theme: ‘Strategic Leadership: My Political Experience,’ Tinubu took a swipe at the president’s monetary policy, arguing that as a strategic partner in the formation of the government, it is incumbent on the leaders to “speak truth to power.”
He explained that though the government has had recorded achievements like the fight against the Boko Haram insurgency, there was need “to move closer to the overarching vision; we now have to shift primary focus to the economic front.”
Tinubu observed that: “the desired economic restructuring will require a change in economic mindset and strategy. We must avoid the nostrums of mainstream orthodoxy that say government deficits are always bad.
“In the situation we face, deficit spending is essential to bolster aggregate demand and direct funds to projects that build infrastructure and bolster employment.
“We must better harmonise monetary policy with fiscal policy. It undercuts our goals if monetary policy is unduly tight at a time fiscal policy begets deficit spending.
“We must also realign trade policies with our need to create a meaningful industrial base and more potent agricultural sector. We can no longer allow cheap imports to preclude the development of industries and sectors strategic to our enduring economic future.”
Speaking on the economic policies of the government further, Tinubu said: “If you’re holding too much tight; let me give you an example, reserves, what they called security reserves in the bank is at 20 per cent, you have to be able to bring it down.
“If the government had to push its treasury bonds to 18 per cent up front, the effective rate of borrowing is at 23 per cent. If I have a billion naira, and you have to give me N180 million up front, do I have to work, do I have to do anything again?
“So those are the factors they have to look at quickly to ease monetary policies. You have to stimulate this economy, you have to spend yourself out of this recession and you cannot do that by consistently stifling the banks of liquidity. It is their money; it is their saving. We have to criticise ourselves when it is necessary, and speak truth to power. We are the power, we speak truth to ourselves.”
On the performance of the apex bank with regards to monetary policy, the APC leader said: “I am not here to evaluate the performance of the governor of the Central Bank of Nigeria (CBN), let the Commander-in-Chief, the president do that. But when we see contradictions in the policy, we have to talk about it. This is nation of freedom, a democratic society, our government.
“We are not like the other party who will invent one lie to lie and bury the truth. We have contradicted ourselves, it is not the fault of government. The Monetary Policy Team have to get together and review it, monetary policy need constantly review, evaluation of how will it affect the market and ordinary people.
“Because if there is no liquidity, the banks would price out the ordinary man. And when you look at the inflation rate at 18 per cent, you are talking of recession, the danger is that it might get to 23 per cent.”
He went to state that “in relative short order, the Buhari administration has done what the prior government seem unable to do. With the courage and dedication of the military, Boko Haram has been subdued.
“Also, notable and significant progress is being made against corruption. Press freedoms and civil liberties are protected, putting to lie those who cried that President Buhari would not respect democracy and rule of law.
“The decline of high oil prices threatens to be a long-term phenomenon. It placed the nation in recession last year and revealed the structural weaknesses of our national economy.”
Tinubu also recommended “strategic objectives during this period of economic uncertainty must be to re-engineer the economy bottom up, diversify the economic base, strengthen our industrial base, modernise infrastructure, enhance agriculture, and provide employment. And of course, ease of doing business must not be overlooked in order to attract foreign investment.
“The lower oil prices also reduced hard currency earnings. This undermined the naira, causing a steep rise in the cost of imports. The higher prices have suppressed aggregate demand, causing a decline in business activity.
“The challenge before us is a difficult but not impossible one. If we stick to the progressive beliefs of the APC, we shall overcome these difficulties to place the economy on surer permanent footing.
“No national system is perfect. In each, exist some contradictions. This is but evidence of the imperfection of human nature itself. However, a nation in progress seeks to minimize, not harvest additional contradictions, otherwise its leadership strategy is doomed to fail.”
Tinubu also warned that lack of true fiscal federalism poses great danger to the country, adding that “unjust allocation of resources makes a fertile ground for extremism.”
The former governor also donated the sum of N10 million to the National Defence College as part of his contribution to enriching the strategic development of the college.
The Commander of the college, Rear Admiral Samuel Alade, commended Tinubu’s efforts and contributions in advancing the nation’s democracy.
Alade harped on the imperative of strategic leadership as a key component of nation building and development.