EX-Nigeria Bar Association (NBA) President Dr Olisa Agbakoba (SAN) has written to President Muhammadu Buhari, with suggestions on how Nigeria can get out of recession.
In the September 15 letter, which he also sent to Senate President Bukola Saraki, and House of Representatives Speaker Yakubu Dogara, Agbakoba said Nigeria was suffering from “malignant metabolic economic syndrome, complicated by inflation, high interest rates, unemployment, weak infrastructure and results of the global fall in the price of oil.”
According to him, it is a gloomy state of affairs which, if not treated with urgency by introducing strong fiscal, trade and monetary policy, could lead to depression.
Among Agbakoba’s recommendation is that the money from the Treasury Single Account should be returned to the banks at single digit rates, and that banks’ recommended lending rate should not exceed five per cent.
The banking sector, he said, requires strengthening, and must be empowered to lend.
“I feel that the Central Bank of Nigeria (CBN) should focus on productive value of the economy, and not the numerical value of the naira.
“The recent devaluation of the naira by the introduction of a floating naira exchange rate has not yielded positive results, as we see the naira spiralling downwards.
“In fact, the new forex regime caused a drop in the GDP from $500 billion to some $350 billion by reducing per capita income to below $600,” Agbakoba said.
He recommended switching from Austerity Policy to Growth Policy, which he said will instil hope and form the basis for the way forward.
According to him, to boost the economy will require massive spending on infrastructure and public works, which will also require manpower resources.
“This is the Keynesian economic model. This way we will spend our way out of recession with the objective of reducing inflation. The CBN should reduce the MPR (Monetary Policy Rate) to single digit of say five per cent, and create a framework for quantitative easing,” he said.
Agbakoba said Nigeria needs to establish a Development and Guarantee Bank to provide financing for national development, which can be supported by asset securitization.