APC, Atiku lambasts CBN over response to oil price crash

Atiku Abubakar

The opposition political party, the All Progressives Congress, APC, and one of its presidential aspirants, Atiku Abubakar, on Thursday criticized the series of monetary policies unfolded by the Central Bank of Nigeria, CBN, to reduce the pressure on the Naira as oil price dwindles.

The Monetary Policy Committee, MPC, of the bank had announced the measures at the end of its meeting in Abuja on Tuesday after it considered vulnerabilities in the domestic front as well as the
exposure to changes in the global economy.

The committee, which claimed the domestic economy was strong and resilient in the face of strong global head winds, projected a seven per cent overall growth of the economy in 2014, a figure, the CBN governor, Godwin Emefiele, said was better than the 5.5 per cent recorded in 2013.

The CBN governor, who presented the decision to the media on behalf of the committee, noted the robust expansion in domestic output in the third quarter of 2014 against tepid growth in the global economy, saying this was anchored by the improved performance in services, agriculture, trade and industry.

But the former vice president described the measures adopted by the CBN as contradictory and inconsistent with the prevailing realities on ground, as they had no true premise to justify the drastic panic measures being taken.

Besides, Mr. Atiku said claims by the Committee that it created a total of 600,000 jobs in the second and third quarters of 2014 in the informal sector did not reflect reality, as most of the jobs were mere hand-outs based on fanciful schemes with attractive acronyms.

“They add very little to the National Productivity Index and have been designed for cosmetic political intentions,” he said.

He described as despicable claims by the CBN that the N200million Commercial Agriculture Credit Scheme created only 166,790 jobs since 2009, pointing out that this translated to creating 33,000 jobs per year at the cost of N1.2million per year each creation.

“The managers of our economy should be sincere with themselves and Nigerians. Hiding under the umbrella of international economic development trend to justify our current predicament is misleading and deceitful. The economy is not as strong as they make us believe and the “global head winds” cannot fully explain our dilemma. Key vulnerabilities in the economy have been noticed a long time ago,” Mr. Atiku said.

He said the indices were clear long before that that economy was heading for the rocks, as there were uncontrolled spending and lack of discipline in budgetary implementation by government, resulting in huge foreign and domestic debt portfolios of $9.3 billion and N8.9 trillion respectively.

Besides, he said the rapid depletion of the country’s external reserves, which stood at about $68 billion under Yar’Adua in 2008 to as low as $36.75 billion at the end of October 2014 as well as the misapplication of the excess crude account, reducing it from $22 billion in 2008 to $470million today were all signs that the management of the economy was not in the right direction.

Mr. Atiku blamed the present crisis on excessive government borrowing and higher bond repayment prices with higher interest rates, pointing out that it was alarming that the MPC claimed the depletion of the foreign exchange did not have any bearing on the genuine foreign exchange need of the country.

The CBN, he said, needs to fine-tune its policies such that while targeting currency speculators on the one hand, it could also boost investors’ confidence to forestall capital flight.

On the decision to increase cash reserve ratio, CRR, from 15 per cent to 20 per cent and the Money Policy Rate, MPR, from 12 per cent to 13 per cent, the APC presidential aspirant said this would increase the cost of borrowing, which would affect small and medium businesses and
reduce their capacity to expand and create jobs.

He said while the banks and speculators were primary targets of the CBN action, the challenge of protecting small scale businesses must be equally addressed.

“We must drastically sanction corruption and nepotism and create competitive services that will stimulate the growth of a private sector driven economy,” Mr. Atiku said. “Even though the economy is in a desperate situation that warrant desperate measures, Nigerians should not be made to face desperate times without hope for a better tomorrow.”

The APC on its part faulted the decision to devalue naira, described the development as unhealthy for the country’s economy, as its implications on the people and the economy were serious.

The National Publicity Secretary of the party, Lai Mohammed, said in Abuja that the devaluation of the national currency was the worst thing that can happen to any nation.

“All it means for a country like ours, which is import dependent, is that more Naira will be needed to buy raw materials and machines. It also means that very soon cost of living will go up,” Mr. Mohammed said.

He said the APC had always warned government about the implication of its economic policies, particularly the ones against organised crude oil theft and the high cost of producing oil, which the party believes was one of the highest.

The APC spokesperson said the party had advised government on the need to diversify the country’s economy and spend more of the resources in finding new oil reserves, as was the policy by Angola and Brazil, which reinvested about 40 per cent of their resources in the development of new oil deposits. Nigeria only invested about two percent.


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  • Mr. Abdin

    Well said Atiku Abubakar your comprehensive analysis about the Nigeria economy is highly commendable this shows the kind of experience you have gathered in the area of governance and and policy implementation which has been the problem of the present government that has continue to take Nigeria down the drains as a result of poor and inconsistent policies that are tantamount to the cooperate existence of our dear country Nigeria. That is why the right things need to be done in order to fix this country for the betterment of the lives of ordinary Nigerians. Lastly agriculture must be give a special attention in order to create wealth among the population, God bless Nigeria amen.

    • Henry

      Budu. U re a deranged fellow. U mentioned ABU(North West) and OAU(South West) becos these areas seemingly supports APC. If U were nationalistic enough, why didn’t u mention UNN? Who even told u that Atiku as a person can articulate the economics behind Oil? For ur info., he has gat some tutors. So stop fooling urself here. U re a biased APC sentimentalist. I’m not a fan of President Goodluck, but such uncivilized comments coming from dogs like u makes me sympathetic to the President.

  • Baba Jada

    Atiku is right, their employment statistics are made-up. you cannot send people on TAN rally and claim you have employed 600 000, how can you call Hanging posters a real job. The excessive spending of the administration makes it impossible have excess funds which can be used for recruitment. GEJ has driven the Nigerian economy to the ground, he has to be impeached before it is too late.

  • Isi Agwo

    You would think that a so called Business Editor should be able to spot it when Grandfather of Corruption Atiku is demonstrating economic illiteracy. But one should not expect too much if the wishy-washy report is in Propaganda Times. Which government sits down somewhere and on its own decides to pay “higher bond repayment prices.” How about having 1 trillion dollars in foreign reserves when over 90% of the country’s roads, airports, universities, primary schools, hospitals … have reached the worst form of decrepitude. It is just money stored away for people like Grandfather of Corruption Atiku to steal and build private universities and marry more wives.

    • Swagger

      Show us the schools, hospitals etc you built with the money, my friend. That money could not also provide jobs abi?

    • Mr. Abdin

      .He is not as clueless as your TAN chairman

    • Denis_NG

      OK, the foreign reserves have now been depleted and the roads are still bad, the airports still lack functional toilets, universities still churn out unemployable graduates, primary school pupils still take lessons user the trees and our hospitals remain consulting centers. What have you to say to that. Atiku was very articulate and demonstrated a clear grasp of basic macroeconomic functionality.

      Rather than devalue the naira, what the CBN ought to have done is allow the currency to fall on its own. By allowing the currency to float, it may or may not fall to the level the CBN now brought it, and our foreign reserves would still be intact (of course, provided the vultures in Aso Rock) keep off their paws. The implication of a weaker naira is increased costs of doing business, increased money demand that will raise the money supply and ultimately ferrets in hyper inflation. The outcome, naira will continue to nose dive. Investors confidence takes a hit and recession follows.

      Conclusion – CBN apparently did not think through its decision to devalue naira. Atiku was right in his criticism and his recommendations certainly have merits.

    • Bunduma Mohammed

      Jonathan the father of curruption in Nigeria cannot even define economics. he take Ngogoro and sleeps every day.

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    • sir Oscie

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  • sir Oscie

    Oshe Baba Turaki..
    I hope Dr Okupe and Ruben are Abati listening before they’ll jump into a monotonous defence of the incomprehensible while executing severe character pillory in the face of a far superior argument…#ANigeriaForAll

    • Kay Soyemi (Esq.)

      I just love the “Economic Hat” on Atiku.

      He is clearly heads and shoulders above all else scrambling to be President at this time. He would be an invaluable member of Team APC, if the party can unite to get power in 2015.

      Not so sure about his propensity for…though!

  • Ken

    Hahaha…saint Atiku. Nigerians and their short memory. As long anybody criticises this govt – from Atiku to Obj to Buhari to Tinubi to Amaechi to Kwankwaso…just name it, the person is right. SMH

    • Kay Soyemi (Esq.)

      Ken, in fairness to Atiku, his grasp of economics is staggering and proven.

      It is just his other weakness that I cannot stomach in anyone.

      He was a Perfect VP in charge of the economic direction of the country. Not sure how I’d see him as President though.

      • Bunduma Mohammed

        Jonathan as a PHD holder cannot do half the analysis done by Atiku. I stopped respecting graduates from Uniport honestly because I cannot understand how somebody like Jonathan Goodluck can earn a Masters degree from ABU or OAU.

        • abeem

          Agreed, because we have a proven case that everyone is aware of.

      • Okey

        Like or hate him, the Turakin must get our approval; his so-called weakness is not inclusive of the one that will spill the blood of monkeys (poor masses) and baboons (rich men) on the streets of Nigeria.

        • Kay Soyemi (Esq.)

          Howbeit, he would still be a better alternative to the current tenant at Aso Rock.

          • Okey

            Let the Turakin get the APC ticket first !

          • Kay Soyemi (Esq.)

            As long as it is the genuine wish of the majority, and free of coercion and intimdation.

          • Okey

            Why entertain fear of intimidation and coercion in an entirely APC affair – primaries ? APC is a party of saints and progressives, I will not entertain any fear, howsoever Atiku emerges is free and fair.

          • Kay Soyemi (Esq.)

            Okey, crossed lines.

            I was referring to the General Elections.

  • abucheadams

    Atiku is right. Nigeria’s biggest problem is FG ineffectiveness, It is high time we diversify our economy.

    • Mr. Abdin

      You are absolutely right that is why we are calling for change, because this government has failed Nigerians.

  • Zirem

    Time up PDP. All this government does is pay lip service and patronize Nigerians. When concern, experienced Nigerians make their contributions on issues bordering us they call it opposition attack, forgetting the Nigeria belongs to all. Change 2015, #ANigeriaForAll.

  • Dr Pat Kolawole Awosan

    The monetary policy initiated by the CBN governor is in line with the failed monetary/economic policies of the finance minister,Dr Ngozi Okonjo Iweala as almost all top public positions in president Ebele Jonathan regime are filled up with South-South/East indigenes.Finance minister,stock exchange director-General,oil minister and recently created deputy group managing director
    of the NNPC,excess crude account etc are all filled with South-South/East indigenes.South-West and other regions have been marginalzed on president Ebele Jonathan’s watch.