Stella Dimoko Former CBN Gov Soludo Says Ex President Jonathan Govt’s Bad Spending habit Caused Recession


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Sunday, May 28, 2017

Former CBN Gov Soludo Says Ex President Jonathan Govt’s Bad Spending habit Caused Recession

A former governor of the Central Bank of Nigeria (CBN), Prof Chukwuma Soludo, has attributed the prevailing economic woes facing Nigeria to the wrong choice of economic policies by the government.

Soludo disclosed this while speaking at an international conference organised by the Department of Business Administration of the Nnamdi Azikiwe University (UNIZIK) in Awka, Anambra State.

The theme was: Managing a recessionary economy: Options for Nigeria.

The major cause of the recession the country is facing, Soludo said, is as a result of what he called “bad habit of borrowing” at a period the country was in boom.

He blamed the past administration for plunging the economy into a glitch, saying the government did not act on time to save the situation.

Soludo, a professor of Econometrics, criticised the Treasury Single Account (TSA) policy, which, he said, stifled the economy further because it channelled public sector funds to the CBN.
He expressed optimism on the possibility of the country coming out of the recession. He said managing a recessionary economy did not require rocket science, noting that Nigeria could overcome the current economic setback faster if the government put in place appropriate policies.

He said: “Huge spending by government was one of the ways of solving the economic problem, but two wrong steps by the current government ruined that opportunity. They brought in the TSA and channelled funds into one account that did not allow spending. They also fixed the price of foreign exchange. These are things you do not do when a country is in economic crisis.”

The former CBN boss stressed that the recession was sown by the last administration but became obvious one year into the tenure of the present government. He said it would not have degenerated but for the inability of policymakers to rise to the challenge.

He said the recession happened because the Goodluck Jonathan administration failed to save earnings from crude oil sale when there was unprecedented boom in oil prices.

He said: “Poor ideas transcended over superior ideas, and we went into recession which was slightly avoidable. That is why academics must be alive to their responsibility of nudging us to reality. If you borrow at a time of boom, what will you do in a time of lack? Even my grandmother in the village knows this.
“At the same time, when we had boom, we had unprecedented unemployment. The problem with Nigeria’s policymakers is that once oil goes up, we take it that it will remain so, and we continue to spend. But once there is a shock and oil prices go down, we just think it is temporary and we start borrowing. Nigeria can be fixed, and what it takes to fix Nigeria is not rocket science.”

Soludo hailed the government’s diversification policy, saying it would save the economy beyond oil and also save it from shocks induced by vagaries of the international oil market.
He also called for fiscal federalism to help the states and local governments live beyond “running to the centre for their sustainability”.

The Vice-Chancellor (VC), Prof Joseph Ahaneku, said the theme captured the economic challenges confronting the country, which, he said, built up through decades of sub-optimal management of the material and human resources.

The VC said the conference was incisive in analysing the country’s economic woes and formulating the possible ways forward. He praised the department for organising the event in line with the school’s tradition of generating academic discourses to proffer solutions to issues of national and international concern.

The Nation


  1. Who doesn't know that before.
    Jonathan encouraged so many things under him.
    No comment jare.
    I CNT type

    1. Who doesn't know what?are they not still borrowing now ?beg they should just fix what they have already damaged he was part of it too.
      Instead of those their story I am tired of it alreadyπŸ˜ˆπŸ˜ˆπŸ˜ˆπŸ˜ˆπŸ˜ˆπŸ™…

  2. God bless you Prof. Jonathan administration was a bad market.

  3. I do not agree pls.
    I remember vividly amaechi saud okonjo shouldnt save fir states they he already saves 1bn per month for rivers.
    Enough of all these silly blames and counter blames. Gej messed up cos he didnt want to step on aome mighty toes and now that has cost him and also cos he doesnt understand politics iant about tribe but interests. He had the aimple choice of chnaging his vp who had no political value but refused and that was the beginning if all his woes and thats why he lost cos the northern cabal wanted one of theirs who would then takeover after gejs 2nd tenure.
    Now apc is blaming gej when more than half of apc worked with gej.
    Every state shld save for themselves and let everyone face their own problems

    1. You are talking about state or federal monies or income? Are you talking about savings during oil boom or borrowing during oil boom? Are you talking about the Switzerland's release of Abacha's loot that we only got to know a year after the administration left just because Okonjo and her former boss shielded it from our knowledge? Are you talking about the dollarization of the Nigerian political sphere with federal monies because of the elections? There are many questions you should channel your reflections on before commenting. Sovereign crude fund that State governments have right to is different from monies under the Federal government. Perhaps Onimisi needs to learn that first before commenting.

  4. Chukwuma should shut up please. Ever since he fell off with Iweala and others in the Economic team of OBJ's government, he's not being himself.
    It's easier to be criticize others but what does Soludo have to say about the fact that his time as CBN governor midwife the biggest scale of graft in the banking industry in Nigeria?
    As if that was not enough, this same Charles of a guy would have messed our economy even more if he had been allowed to go through with his plans to re-denominate the naira.

  5. Useless people everywhere.
    #sdk you must boo me



  7. #Learn to let go. That is the key to happiness*

  8. A so-called President who openly and publicly declared that "stealing is not corruption"; is one of the worst things that ever happened to Nigeria.

  9. People in the system are saying same thing.I don't just want to believe it.

  10. God will punish Jonathan. Uslessman

  11. This ones are belle merchants. He is saying so that his oga in London will applaud him.

  12. Nothing new about this one.

  13. @ Anon. 14:35. When or where did you hear GEJ say such? All those were campaign propaganda used by the APC to mislead Nigerian voters.
    Do I support the PDP or its members? Hell no. But we live in a time and age where it's pretty simple to shape public opinion albeit negatively and that was what the APC and AKPD Media and Message (the firm that ran Obama's campaign and which was recruited by the APC to run her campaign and media propaganda in the build up to the 2015 elections) did. But we also owe ourselves the duty to seek out the truth so we can fall less prey to misleading information.
    I will recommend Segun Adeniyi's most recent book- Against The Run of Play-for you to read in order to get more education on this subject (the purported statement by GEJ).

  14. But let's look at this in a different perspective.
    Reading the article up there and the theme of the conference at stated there, was this what he went to say? If yes, then he made a really awful speech. Rather than playing the blame game, why don't proffer solutions. The deed had been done and you can't change it.
    Ah, we don't need more people causing trouble, we need solutions

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