Former Deputy Governor of the Central Bank of Nigeria, Tunde Lemo, has painted a sobering picture of Africa’s largest economy, calling for immediate reforms to address its deteriorating condition.
Lemo emphasized that managing Nigeria’s economy in its current state is no easy task, as he highlighted several concerning issues such as a depreciating local currency, GDP growth below population growth, high inflation at 24%, soaring unemployment, dwindling foreign exchange reserves, and a substantial national debt burden.
Speaking at a breakfast event hosted by the Lagos Business School, the former CBN Chief outlined crucial steps needed to reverse this economic decline.
He called for a reduction in the cost of governance, a crackdown on oil theft in the Niger Delta, a review of the minimum wage, a commitment to refrain from taking on new debt, and reforms within the central bank.
Lemo particularly emphasized the importance of selling assets to alleviate Nigeria’s debt burden, stressing the need for transparency and proper valuation in the process.
Regarding interest rates, Lemo acknowledged the challenges of achieving low-interest rates during a period of high and rising inflation, primarily caused by monetary and structural failures.
While he commended the government’s efforts to unify the nation’s exchange rate, he advised against merging the two rates, suggesting that a slight gap between them should not overly concern the CBN.
He also called for the clearance of outstanding commitments, a review of the negative list, and credit support for balance of payments.
Lemo praised the government’s initiative to reform tax laws but urged expeditious action, focusing on enhancing tax compliance rather than increasing the tax burden.
While he supported the removal of the petrol subsidy, Lemo noted that its resurgence was due to the devaluation of the Naira, emphasizing the need for exchange rate stabilization.
Lemo criticized the size of the federal cabinet, stating that it set a poor example and called for more significant changes at the top.
He cautioned that Nigerians should expect a challenging road ahead but urged the government to hire competent individuals capable of addressing the nation’s economic woes.
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