Bola Tinubu, standard bearer of the All Progressives
Congress (APC), says there’s nothing bad in the country having a budget
deficit.
Tinubu said this on Friday at a presidential dialogue
organised by the Nigerian Economic Summit Group (NESG).
President Muhammadu Buhari recently signed the N21.83
trillion 2023 appropriation bill into law, with a deficit of about N11.34
trillion.
The government intends to finance the deficit mainly by new borrowings which would compound Nigeria’s public debt stock already at N44 trillion.
But according to Tinubu, the country’s the budget deficit is
“not necessarily bad”.
“I do not hold to the mainstream view that all forms of
inflation are best tackled by interest rate hikes and shrinking the economy.
Supply-induced inflation does not lend itself to this harsh medicine, just as
one does not cure a headache by plucking out one’s eye, ” he said.
“I do not embrace the conventional wisdom that fiscal
deficits by the national government are inherently bad. All governments,
especially in this era of fiat currency, run secular budget deficits. This is
an inherent part of modern governance. The most powerful and wealthiest
governments run deficits, as do the poorest nations.
“A budget deficit is
not necessarily bad. Look at the Japanese example with high government
borrowing and low inflation. The real issue is whether deficit spending is
productive or not. Unproductive deficit spending is a compound negative.
Especially if backed by excessive borrowing of foreign currency. This is not
classroom economics but it is the lesson of the real economic history of
nations.”
SUBSIDY OUTLIVED ITS
SHELF LIFE
Tinubu, further speaking on his economic agenda for the
country, reiterated his to plans remove subsidy immediately he gets into
office.
He said the existence of subsidy has outlived its stay,
adding that the funds will redirected “into public infrastructure”.
“We must remove the
PMS subsidy immediately. It has outlived its shelf life as a public good. We
will neither subsidise neighbouring countries’ fuel consumption nor allow a
select few to reap windfall profits and hoard products.
“And the subsidy money will not be ‘saved’ because that
means elimination from the economy. Instead, we will redirect the funds into
public infrastructure, transportation, affordable housing, education and
health, and strengthen the social safety net for the poorest of the poor, thus
averting increased security challenges.
“Fiscal policy will be the main driver. Monetary policy is
weaker and a less effective instrument. Bad monetary policy is, of course,
destructive. But even good monetary policy cannot carry the load the fiscal arm
can. Thus, we must steadily remove ourselves from the fiction of tying our
budgets to dollar denominated oil revenues.
“This is effectively pegging our budget to a dollar
standard. It is as outdated as the fuel subsidy itself. It is also restrictive
and ties the economy to slow growth. Just as the common man must mentally sever
the cord to the subsidy, the elite must sever the cord to this artificial
fiscal restraint.”
PRIVATISATION OF
ECONOMY
Tinubu assured that if elected, the private sector would be
the prime driver of economic progress of Nigeria with his administration
providing the enabling framework for the sector to drive.
He also said before economic recovery could be achieved, the
nation must be secured.
“First, to achieve the economy we seek, we must resolve the
pressing security issues. No nation can flourish with terrorists and kidnappers
in their midst,” he said.
“My core belief is
that the private sector must be the prime driver of economic progress. However,
the government establishes the framework within which the private sector must
operate. If that framework is sound, the private sector will flourish. If the
framework is frail or incomplete, then the private sector will struggle.
“For our industries to thrive, they need inputs, many of
which are agriculture based. The present administration has invested heavily in
agriculture, providing loans and expanding the country’s total area of
cultivated land for crops, livestock and fisheries. We will also promote
vibrant commodity exchanges that will guarantee minimal pricing for produce.
“We will build on
this, with a focus on using technology and expertise to accelerate growth in
yields. We will deliver the critical infrastructure necessary to achieve the
commodity transformations and agribusinesses to plug seamlessly into higher,
more lucrative, entry points in regional and global value chains.
“Building on this foundation, we will accelerate the
faithful implementation of the “infrastructure master plan” by adopting proven
financing structures till we deliver an acceptable stock of hard infrastructure
through seaports and airports; and road, rail and water transportation linkages
that can support our desired economic growth.
“Fixing the perennial problem of energy supply is a top
priority. There is no version of the world where Nigeria’s ambitions for itself
can be achieved without solving the problem of how to provide energy to homes
and businesses across the country.
“What we need to do, going forward, is to improve the
enabling environment, further decentralise transmission, and deliver cost
reflective tariffs to attract more private investments in the sector.”
He added that his administration would, urgently address
fiscal, monetary, and trade reforms to effectively increase domestic production
by accelerating inclusive growth and job creation across Nigeria.
Tinubus said on his
first 100 days, if elected, he would hit the ground running by selecting a team
of technocrats that will help him run the country as he did when he was
governor, adding that building a good team was important.
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It is very insulting to have Tinubu talk about d economy of Nigeria bcos d economy is taller than his brain and all he has done in life. Nigeria is tired of dead-walking leaders which Tinubu represents. Tufiakwa
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