Nigeria undergoing economic reset, says Governor Soludo

Nigeria undergoing economic reset, says Governor Soludo

Nigeria’s economy is currently undergoing a reset with the removal of petrol subsidy and floating of the naira, Anambra State Governor, Prof Chukwuma Soludo, has said.

The governor said it was sensible to eliminate the ‘’debilitating scam’’ called subsidy which benefitted largely the urban elite.

He spoke on Thursday while giving the 13th convocation lecture of Abuja-based Veritas University.

Soludo, who was Central Bank of Nigeria (CBN) governor between May 2004 and May 2009, commended Tinubu for ending ‘forex and electricity subsidies.”

The governor said, “Nigeria is undergoing a fundamental and disruptive reset. Hopefully, we have ended the debilitating scam called fuel subsidy as well as the forex and electricity subsidies.

“We have entered a ‘muddling-through’ phase which we must navigate carefully. Soon we must migrate from the destructive subsidies that benefitted largely the urban elite to a productive social contract that creates opportunity for all.”

Soludo urged Nigerians to sit up and craft a pragmatic new deal and an emergency national infrastructure plan similar to the United States (US) Marshall Plan to take the nation to great heights.

He said, “As we muddle through the shocks occasioned by the needed disruptive changes, we must sit and craft a pragmatic New Deal for Nigeria plus an emergency national infrastructure plan akin to the U.S Marshall Plan for Europe after the Second World war.

‘’Some elements of the new deal such as the minimum wage legislation, draft tax reform bill, and planned cash transfers are positive signs.

“This moment calls for historic coordination between the federal and state governments to agree on the critical elements of the augmented New Deal and Marshall Plan as well as their implementation to deliver outcomes within the shortest possible time.

“A key issue will be the ‘national plan’ for the deployment of the apparent ‘fiscal/subsidy windfall’.

“I say ‘apparent’ windfall because much of the nominal increase in fiscal revenues is largely money illusion. In the US, dollar terms and real purchasing power terms, much of the current revenue windfall is still far lower than in previous years.

“For example, a state that received N5 billion or $43.4 million as monthly federation account allocation in 2007/8 when the exchange rate was N118 to a dollar and a bag of cement sold for a few hundred Naira would need to receive at least N77 billion a month at current exchange rate and prices to be restored to its 2007/8 position. But the state does not get even a third of such.

“Fixing the oil output will be a critical game changer in the short to medium term. However minuscule or even non-existent the windfall in real terms, the federation must be seen to intentionally execute a new deal that pragmatically coheres with our peculiar federalism while urgently addressing the needs of the people.

“Besides the humongous investment to build infrastructure for the 21st century, we urgently need to prioritise our national investment in human capital — to transform our abundant human resources into productive capital. In the 21st and 22nd centuries driven by digitalisation, only societies that intentionally mine their human capital will triumph.

“Deploying our depleting natural resources to invest in the bridge to the future—human capital—will not only give our teeming population a stake in society but also secure their future.

“As a country, we must aim to remember this time in our history as the moment when we dared to remove the negative subsidies but deployed a part of the windfall to benefit our children and youths—via their education and health.

“At the minimum, we should set a national target to bring down the out-of-school children to zero within 5-8 years, and qualitative tuition-free secondary education to all Nigerian children within 10 years, while mainstreaming selected centres of excellence for the exportable labour force.”

The governor charged the graduating students not to fail the country.

He said, “The future you seek is in your palms, and only those who plan can control the future. As I look into your eyes, I can see hope.

“Nigeria may not have offered you much, but in fulfilment of your divine purpose on earth, you will be expected to give more than you have received.’’