Professor of political economy, Pat Utomi, has said that the loans that are being taken by the Nigerian government are ‘meaningless’ and are not a solution to the current economic problem in Nigeria.
Utomi said this while discussing Nigeria’s economic issues and food shortage problem in an interview with ARISE NEWS on Thursday.
The professor said, “There’s no surprise at all about where we are, I saw it coming. We just kept going the wrong way and seriously pursued what will get us into the ditch.”
He said that those who were qualified to lead the different sectors of this country were not in power as meritocracy became a joke in Nigeria, and people who manned positions did so not out of competence, but out of nepotistic influence.
Utomi then said that the loans being taken to shore up the naira are ‘meaningless,’ as the loans will only be able to hold the naira for a matter of days before the currency dips again.
He said, “We should not be panicking and rushing and borrowing 1.3 billion here, 3 billion there to shore up the naira. We should realise that the naira is tumbling because we have not been producing for years, it’s been looking at us. Now, we have the capacity, again, like an army on the march, to really move into production.
“We have to have a strategy. Take our factor endowments- okay, this part of the country is strong here in terms of endowments, that part of the country is strong there, and literally organise with industry clusters, young people moving there, the incentives, and try and take on specific value chains. Use limited industrial policy.
“Clearly, I am not suggesting what some people are rushing into- return to import substitution type, general tariff protection, those don’t work. You will create permanent infant industries. You must take our latent comparative advantage on particular value chains and really aim to dominate those value chains, beginning from education of people around there.”
Utomi then addresses the issue of food security in the nation as he explained, “The reason that food prices are the way they are is significantly because we are not producing food. The farms have been abandoned by farmers who feel insecure, that’s a critical reason. How do you deal with that? There’s short term, there’s medium term, and long term. Immediate short term, if you want to call it that, is to ensure that whatever they are, grain reserves, all of those, shore up immediate supply. But immediately you begin to deal with that, we must mobilise every kind of security force available.”
He said that the idea of state police that is being sought to be implemented should cascade further down, and that the FG should strengthen local militia to protect the farmlands and assure farmers that they are safe.
“Let the country know that we are in the moral equivalence of a war. Let all hands literally get on deck in an organized manner, almost like an army on the march, and we will get food out. Example effect will lead to prices beginning to calm,” he said.
Utomi was then questioned concerning the upcoming Monetary Policy Committee (MPC) meeting and how the discussions there could ease Nigeria’s economic problems, to which he answered, “Where we are right now, we shouldn’t focus too much on monetary policy. We need to go beyond monetary policy. But of course, we must work monetary policy well.”
The professor then said, “I sometimes think that what we are going through is good for Nigeria, because we need something to make us recalibrate. We have a total misconception of what economic growth is about because we have had this windfall with which we used to create big government.”
He then gave his suggestions on how to stabilise the economy saying, “My first suggestion is that we stay away from panicking, because what happens in this kind of circumstance is that they panic. They throw all kinds of policies that won’t work, and then you will go into a downward spiral.
“You must calm down, look at the fundamentals- why do we have this problem. Don’t get rushed into a push from outside who don’t feel the pressure, but don’t get cornered into people who just react. Just calmly look at what your national strategy should be, and systematically implement.”
