By Babajide Komolafe
allAfricaJuly 30, 2002
The policy on open, liberal economy, privatisation of public utilities and devaluation of the local currency prescribed for Nigeria by the International Monetary Fund (IMF) has been identified harmful to the country's economic development.
Former Director of Budget and Planning, Federal Ministry of Finance, Chief Onwali-Kuye made this observation, while delivering a lecture entitled, "Nigeria's relationship with the IMF: The way forward" at the July edition of the monthly lecture/luncheon of Finance Houses Association of Nigeria (FHAN).
According to him, continuous and massive naira devaluation, excessive mopping up of liquidity by the Central Bank, liberalisation of imports by which all manner of goods are imported without regulation, privatisation of all major government corporations except those bought by Nigerians, and other measures which stem from the policy prescription of the IMF, will not move the nation forward.
He urged the Federal Government to critically evaluate the advice of IMF, accept those found consistent with Nigeria's restructuring programme and ignore those that are negative.
Quoting the author of "The Mystery of capital," Omowale stated that, IMF's regular solution which prescribes the removal of barriers to trade by lowering tariffs, balancing budgets by government, raising interest rates and devaluation by the Central Bank transfering the little investable capital in developing countries to the West and America, stressing that this is evident in the fact that there have not been a single success story among countries that have implemented these policy prescriptions of the IMF.
Against this background, the former chairman ICON Limited (Merchant Bankers) commended the recent suspension of IMF staff supervision of the country's economic programme, saying it is a blessing in disguises.
In his words: "The monitoring activities of IMF staff sometimes negate the sovereignty of the country being supervised. In many respect, the supervision becomes humiliating to the government and the people.
"Often, the staff behave as if they are superior to the government elected by the people. They dictate, albeit, in a subtle manner, what the size of the budget must be, what amount of that budget must be spent on salaries and wages, capital projects, what fiscal policy the government must pursue, what monetary policy the Central Bank must pursue," among others, stressing these are some of the issues that caused disagreement between the government and IMF.
According to Omowale, the way forward for the Nigerian economy, after the suspension of IMF supervision and monitoring of government's economic programmes, is for the Federal Government to adopt a "closed economy."
He observed that, Nigeria is poor due to the underdeveloped status of industries and agriculture, her infrastructures are in dire need of massive investment hence the need for Nigeria to enhance her development through the adoption of a "closed economic system."
This, he said, becomes imperative in view of the observations of a distinguished former IMF economist, Mr. George Suros, who stated that "globalisation creates a very uneven playing field between the industrialised and underdeveloped economies hence world governments and institutions should find ways to encourage individual countries to follow policies that promote economic growth which do not rely on "Market disciplines, stressing that we (IMF) do not have mechanism for providing incentives and even playing field."
This position, according to Omowale, behoves Nigeria to therefore adopt measures that will protect her nascent industries and agriculture even if the measures include absolute banning of undesirable products, stressing Nigeria should not feel shy in the prohibition programme as rich and industrialised countries have found the measure appropriate to protect jobs and utilise their resources.
Explaining further, he said "in a closed economic system, Nigeria will be able to harness all her resources-men and materials- for her industrial and agricultural development.
The closed economic system is central to the development of Nigeria" noting that India and China closed economic system, they import only necessities and they are free from IMF loan as well as its staff promiscuous supervision and both countries are now industrialised.
Nigeria, Omowale submitted most drop the open, liberal, unregulated economic system that operates only on the discipline of the market averring that being a monopolistic commodities export country without industries to produce goods needed by her people, Nigeria cannot indulge in the luxury of free trade and the mechanism of the discipline of the market.
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