By Our Reporter
A civic technology organization, BudgIT Nigeria, has urged the Federal Government to liberalize the economy by pumping money into it to ease up the system and attract investments and save jobs that had already been lost.
It stated that with inflation at an all time high of 15. 6 per cent, Nigeria’s economy was turning red.
Lead Partner, BudgIT, Mr. Oluseun Onigbinde, told journalists in an interview in Abuja on Tuesday, that lack of stability in the foreign exchange market was having negative impact on the economy.
According to him, government cannot continue to keep a separate foreign exchange rate that threatens investment in the country.
Onigbinde urged government to adopt a floating system in the operation of the foreign exchange market in order to enforce discipline.
He said: “Almost every index is turning negative. Inflation has already risen to 15.6, reserve is already getting below $27 billion, capital implementation has dipped from $5.8 billion on a quarterly basis to $640 million. So there is a big change already.
“The economy itself is shrinking, even growth has already contract and it is in the negative that is why we tell government that they need to ease the system, put more money into the economy, into contracting, into projects and let that move fast so that a lot of jobs that have been lost can be recovered.
“There is also need to take a deep down look at the foreign exchange market. We don’t want to take some corrections and since we don’t want to take some correction in terms of pricing of the currency, the market is fighting back in a very harsh way; we need to liberalize that foreign exchange market.
“If we continue to keep three windows – an official exchange rate market at N197, a parallel market at N360 and we also keep internal bank rate at N280. We are keeping a distortion and uncertainty in the market and that is not really helping people.
“So we need to liberalize and open that up. Let us have a floating system if we want to take that discipline and if that is going to bring investors back, if that is what is going to bring that confidence back into the economy then fine. If we don’t do those at the end of the day we will still find out that we are going to meet the IMF for some kind of bailout.
“You have a single market of welling buyers, those who have foreign exchange from autonomous sources, those who want to buy foreign exchange – everybody comes into that space and agrees on the price that they want to sell. The CBN, if it has dollars, does not just come arbitrarily decide the price it wants to give a dollar, they come to that market and they all trade.
Onigbinde said that the federal government should ensure an inclusive budget, as previous budgets had recorded poor capital implementation.
According to him, the implementation of capital projects had not gone beyond 30 per cent over the years.
He, therefore, called on the federal government to focus on few capital projects that it can implement.
“The expansionist approach of the 2016 budget is very bold but the assumptions on which the document was made straddle the edge of unfeasible expectations, specifically with respect to non-oil revenue and independent revenues,” he stated.
“We have always looked at capital budget and it is not done more than 30 per cent over the years. It is only the recurrent expenditure that has always done 100 per cent, 99.5 per cent most times.
“The question is, how do we strengthen that? The process of spending in capital budget is bureaucratic – procurement, an award, releases, a lot of terminologies involved. Let us do fewer projects. We do too much projects. Why do you do over a 4, 000 capital projects in the economy, why?
“Let us chose specific strategic projects as anchors. That is why when the federal government came up with the SIP and said we were going to have 34 priority projects, we respected that a lot. Because we that is where government direction is.
“If the capital budgets are few, we will have more direction, we will have more attention to it.”