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If elected president at the 2019 polls, Kingsley Moghalu, a former deputy governor of the Central Bank of Nigeria (CBN), will replace the current government’s N500 billion social intervention programme for a similar-sized venture capital fund that will finance small businesses and create jobs.
Moghalu, 55, will also clear the way for more private investment in infrastructure, overhaul the educational system and subsidise production instead of the practice of subsidising consumption as is currently done with petrol.
He also promises to scale up human capital investments, promote renewable energy and turn a blind eye to the crude oil that has greased the economy for decades.
“My economic vision is one that is not based on oil or natural resources, but on innovation and human capital,” Moghalu said in an exclusive interview with BusinessDay.
“My government will take on unemployment through the creation of a N500 billion venture capital fund to boost SMEs access to finance and create jobs.
“A competent government does not create jobs; rather it creates an enabling environment for jobs to be created. We will subsidise production but we will never subsidise consumption. That will stimulate the economy while creating jobs at the same time,” he said.
Africa’s most populous country is scheduled to hold presidential elections in February next year as well as vote for lawmakers and state governors.
The distaste among Nigerians for incumbent President Muhammadu Buhari has festered, after series of policy missteps from a 15-month resistance to float the naira and delays in appointing cabinet ministers and signing off the federal budget contributed to the economy’s first recession in a quarter of a century.
Unemployment rate has ballooned to a six-year high of 18.8 percent in the third quarter of 2017 as shrinking economic activity eats into company profits, forcing mass layoffs.
While the economy has gone on to exit recession in the second quarter of 2017, the worry is that the recovery is oil-led and well short of the minimum 6 percent growth required in Nigeria where the population has swelled at an average of 3 percent over the past decade. The economy grew marginally by 0.8 percent in 2017, the National Bureau of Statistics said Tuesday, February 27.
The stick Buhari is getting from Nigerians is in stark contrast to the wide acceptance he got at the last poll in 2015, when he promised to rid the country of the wide spread corruption that marred his predecessor’s reign.
Critics say he has failed to fulfill his pledges to fight corruption, focusing more on political opponents, and was too slow in responding to the country’s economic slump, triggered by a plunge in the price and the output of crude, its main export.
The government has responded by saying it has made progress against the Islamist insurgency in the northeast while initiating major rail, power and road projects to revive the economy.
While Buhari hasn’t said if he’ll run, his potential candidature remains a subject of much interest after he spent a total of more than five months in London last year receiving treatment for an undisclosed ailment.
Last month, former Nigerian leader Olusegun Obasanjo asked President Muhammadu Buhari not to seek re-election next year, saying he has failed in his management of Africa’s largest economy.
Moghalu also has his reservations about the 75-year old former military leader’s handling of the economy, particularly the rising debt profile, calling it “a scandal.”
“The country’s debt stock has more than doubled from N9trillion to N20trillion in less than three years,” Moghalu told BusinessDay.
Nigeria’s total foreign and external debt, inclusive of the 36 states, was N20 trillion as at September 2017, according to data provided by the Debt Management Office (DMO).
To balance lower revenues with the need to boost economic activity, the Federal Government has borrowed record sums to plug a widening budget deficit that is the biggest in six years.
The 2016, 2017 and 2018 budgets all outline massive public spending to boost economic activity, but has been criticized for being too small to make an impact in the $405 billion Nigerian economy, greased by private capital.
Meanwhile the International Monetary Fund (IMF) yesterday projected that Nigeria will “muddle through” with its economic policies in the medium term, according to a Reuters report.
The IMF said in its annual Article IV review of Nigeria’s economy that the outlook for growth has improved but remains challenging. It said “comprehensive and coherent” economic policies “remain urgent and must not be delayed by approaching elections and recovering oil prices”.
While the broader economy is slowly exiting recession, people are getting poorer as real gross domestic product per capita is falling, the Fund added.
“Higher oil prices would support a recovery in 2018 but a ‘muddle-through’ outlook is projected for the medium term under current policies, with fiscal dominance and structural constraints leading to continuing falls in real GDP per capita,” the IMF said.
In the report, it identified risks to growth including additional delays to implementing policies and reforms ahead of 2019 elections, security tensions, and oil prices, a fall in which could see capital flows reversed.
The IMF added that “moving towards a unified exchange rate should be pursued as soon as possible.”
Moghalu served as Deputy Governor of the Central Bank of Nigeria from 2009 to 2014.
As Deputy Governor for Financial Stability, he led the implementation of far-reaching reforms in Nigeria’s banking sector after a combination of the global financial crisis, corporate governance abuses and weak risk management left one third of Nigerian banks on the edge of collapse.
Moghalu’s tenure at the Nigerian central bank was not without controversy. He was charged with executing frequently controversial banking sector reforms spearheaded by CBN Governor Sanusi Lamido Sanusi in a fraught political and social milieu, and was seen by some observers as the heir apparent to succeed Sanusi as governor.
Moghalu publicly articulated and defended the central bank’s banking reforms, including the introduction of Islamic banking as part of a menu of options to diversify access to finance.
Moghalu obtained an M.A. degree at the Fletcher School of Law of Diplomacy at Tufts University, where he was the Joan Gillespie Fellow and Research Assistant in the International Political Economy (IPE) Program, in 1992.
He later obtained a Doctor of Philosophy (Ph.D.) in International Relations at the London School of Economics and Political Science (LSE) at the University of London, UK, and the International Certificate in Risk Management from the Institute of Risk Management (IRM) in London.
LOLADE AKINMURELE
