“I
never could understand why knowledge from 1983-85, in Nigeria, and the Asian
financial crisis, failed to inform the passions spewing out or the subject from
people with access to people who could better inform them” – Prof. Pat Utomi
Renowned
economist and former Presidential Candidate of the African Democratic Congress
(ADC), Prof Pat Utomi, has opened up on the ongoing economic crisis in the
nation.
Utomi
lamented that Nigeria failed to learn from its 1983-85 financial crisis,
blaming it on what he described as the knowing-doing gap of the Nigerian
people.
Airing
his views via his official Facebook page, Utomi advised the Federal Government
to wake up before the situation goes beyond control.
According to him, “When anxieties with the state of the economy rose, as Oil
prices went South in 2015, I was struck by how we went from worry to panic and
how many actions failed to recognize similar experience from our recent history
and more than enough knowledge on what happened before and what was trending in
the global environment. That such knowledge was untapped caused me to begin to
rethink many things.
“How
does Nigeria always manage to lose institutional memory, and what is responsible
for the Knowing-Doing gap that seems to prevent us from properly handling
routine problems without generating crisis of earthshaking proportions.
“Surely
we do not need Harvard Business School Professors Jeffrey Pfeffer and Robert I
Sutton to see that there is a huge Knowing – Doing gap in the policy arena in
Nigeria.
“Pfeffer
and Sutton had in year 2000 wondered how come so many firms show significant
gaps between what they know and what they actually do. You can see this applies
to governments the moment you go to the many talk shops of Nigeria and from
there cast a glance at the policy action arena.
“When at one of these events recently someone reminded me of another one a few
months before when it seemed a vow to defend the Naira was being taken.
He
reminded me that I had said pressure on the Naira, with a significant dollar
earnings dip, was not the end of the world but that a floating “managed”
exchange rate mechanism Bismark Rewane had talked about was appropriate
response and also that in addition a clear game plan on how the financing from
declining Oil receipts, could be bridged to tide over a temporary challenge by
quick borrowing of dollars to shore up supply with other measures to block
leakages could boost confidence.
“I
suggested teams of people credible in economic and financial circles; head off
to critical global capitals to show where we were going. I was convinced that
would have stimulated confidence in Nigeria at a time the gap between the
nominal exchange rate and our purchasing power parity line was no more than six
Naira, as Bismark Rewane pointed out.
“Had
the teams out there telling the world about the new thrust of policy and growth
potential in which decline in contribution of dollars from a sector
contributing to a small portion of GDP was causing tightness, investment flows
will make up for Foreign exchange supply lost, just as a little borrowing could
bridge the financing gap and stave of currency speculations.”
The
renowned economist added that “It seems to me that instead of focusing on a
clear strategy of short, medium and long term perspective plan anchored
diversification of the base of the economy and the tactics to hold off raiders
of the currency by inspiring confidence based on plans for the future, we
slipped into this spurious discussion of symptom called devaluation of the
Naira.
“I
never could understand why knowledge from 1983-85, in Nigeria, and the Asian
financial crisis, failed to inform the passions spewing out or the subject from
people with access to people who could better inform them.
“How
about our national institutions that went through similar experiences with
external shocks and managing access to Foreign Exchange in the before past. Why
did they behave they had learnt nothing before.
“One
of the truly enduring explanations of how Nigeria went into
de-industrialization from the 1980s, even before becoming fully industrialized
is a comparison of Nominal exchange rate divergence from purchasing power
parity.
“A
review will show that the regions of the world where nominal exchange rates and
the Purchasing Power Parity line were a close fit had more growth and
prosperity. Between Africa, Latin America and Asia in the 1980 and 1970s South
East Asia was that zone.
“What
I found even more paradoxical was that those who favour state centrals to drive
development and therefore should embrace some of the postulates of the South
Korean Economist at Oxford Ja Joo Chang are signing off on the European Union
ECOWAS Economic Partnership Agreement (EPA). This is quite curious.
“Let’s
hope enlightenment descends upon us all,” he said.
No comments:
Post a Comment