President Yemi Osinbajo has said rather than being restricted by a single economic ideology, the government is using common sense approach in addressing the economic challenges of the country.
He spoke yesterday at the Nigerian Bar Association’s (NBA) 2018 Annual General Conference in Abuja with the theme “Transition, Transformation, Sustainable Institution” where Professor Olukonyisola Ajayi (SAN) engaged him on Nigeria’s Economic Recovery and Growth Plan (ERGP).
Ajayi had told the VP that while the government says it wants to ensure transition from a mono economy to a diversified economy among other transition plans, an ideological bent to what was being done was not apparent.
Responding, Osinbajo said ideology is no longer central to planning and that what has succeeded was a mix of sometimes a state intervention or basically allowing markets to work. “So, basically, we are concerned about ensuring that the market works; that the price mechanism is the basis for determining how value moves. But also whenever state intervention is required, the state must intervene, for example the social investment programme we have is a state intervention.”
He said the old concept of capitalism as it was known could no longer work because, “you can’t have these numbers of poor people that we have and expect that industries, manufacturing and others will develop faster to cater for everyone, so there must be social safety nets. So for us, it is a common sense approach and we are looking at the happiness of the greatest number of our people, how the bulk of our people can live prosperously.”
The Vice President, who is also the chairman of the federal government’s Economic Management Team (EMT), said one of the reasons the government was being careful in aligning with any of the ideological underpinnings was that “we’ve seen that there is a lot that works.”
He said “Everyone knows that at some point, there was SAP (Structural Adjustment Policy) and all of the different models of the Washington Consensus, but today every one of those things have been proved wrong in one way or the other,” adding that the government was of the opinion that there was a need to be flexible in terms of economic policies and be ready to adapt as quickly as possible.
When Osinbajo announced that interest rates were reducing though still relatively high, Ajayi chipped in that,
“Mr. Vice President, we borrow. You don’t borrow, Sir.”
Responding however, the VP said, “Don’t be under the impression that I don’t borrow. The truth of the matter is that we are all leveraged one way or the other and we are paying back debt one way or the other.”
He said while interest rate was 18% about a year ago but has now dropped to 13% because inflation has been going down month by month.