Former president of the Nigerian Bar Association (NBA), Dr Olisa Agbakoba, on Tuesday called for the introduction of a vibrant fiscal, trade and monetary policies to boost the country’s economy.
He made the appeal while fielding questions from newsmen in Lagos, on “Practical Solutions to some of Nigeria’s Economic Challenges”.
Agbakoba said that the first step in any ailing economy is a diagnosis of its main problems, before workable solutions are preferred.
He noted that although Nigeria had experienced economic setbacks over the years, “there was no time to lament but to chart a clear economic policy direction, which will give value to the economy”.
On monetary policy, Agbakoba underscored the need for harmonisation between the Central Bank of Nigeria (CBN) Policy, and the Minister of Finance’s call for increased public spending on capital projects.
“Note that the CBN increased the MPR by 200 basis point, from 12 per cent to 14 per cent, to combat inflation and stimulate growth.
“The MPR is the anchor rate at which the CBN in performing its role as lender of last resort lends to Deposit Money Banks, to boost the level of liquidity in the banking system.
“If the apex bank intends to increase the level of liquidity in the economy, it reduces the MPR, but increases it when it intends to tighten money supply and by tightening MPR, it has unfortunately, tightened lending,” he said.
According to Agbakoba, the banking sector requires strengthening, and must be empowered to lend.
“I recommend that money from the Treasury Single Account should go back to the banks at single digit rates, and that bank’s recommended lending rates should not exceed five per cent.
“I feel that the CBN should focus on productive value of the economy and not the numerical value of the Naira; the recent devaluation of the Naira by introduction of a floating Naira exchange rate has not yielded positive results as we see the Naira spiralling downward,” he said.
He said that in preferring a solution to this, government’s monetary policy will be required to move from strict monetarism of the “Mitton Friedman School of thought to the Keynesian Model”.
Agbakoba expressed optimism that the nation can recover from recession, and also recommended as a start, the need for a presidential proclamation at the National Assembly, switching from austerity policy to growth policy.
He said this would instil hope and form the basis for a way forward.