Defending Naira With Foreign Reserves Is Dangerous – Moghalu
The presidential candidate of the Young Progressives Party, YPP Kingsley Moghalu has described as very dangerous the decision of Nigeria’s Central Bank of Nigeria, CBN to keep defending the naira with foreign exchange reserves.
Moghalu stated this when he appeared on #Bounce60Minutes, an exclusive interactive show that bridges the gap between opinion leaders and the people.
Answering questions on the Nigerian economy and the apex bank’s decision, Moghalu noted that Nigeria’s economy is sick and the “the problem with economic management in Nigeria is that it is not focused on fundamentals”.
He said: “The fundamental absence of economic philosophy in the Nigerian economic management is why Nigeria’s economy has not progressed after 58 years of independence.
“All we have achieved is to become the poverty capital of the world, with unemployment of 19% and youth unemployment of over 50%; a rising population, rising unemployment and rising poverty.”
The solution, he said, is “philosophical”.
“Are we a capitalist economy? Yes. If we are a capitalist economy, what makes capitalist economies successful? Nobody has answered that question in the Nigerian economic management. I have the answers,” he stated.
According to him, the answers can be found in three ingredients that must be present in an economy that is capitalist to function well.
Continuing, he said: “The first is property right. You don’t have full property right in Nigeria when the government owns the full property rights, and all you can get is a certificate of occupancy, for 99 years.
“You don’t have full intellectual property right. There is no incentive for people to be creative and their creativity is protected so that the financial reward for their creativity is high. That way, you find that a lot of people push their talent toward innovation and creative thinking. We don’t have that.
“Number three, we don’t have capital. You can’t have capitalism without capital.”
He said if elected president of Nigeria in 2019, he would create a 1 trillion-naira venture capital fund that will provide a veritable opportunity for investors to pump the much-needed capital into the Nigerian economy.
“The one trillion-naira venture capital fund is so necessary because you need everything capital to come into the Nigerian economic system. All you have is credit and the conditions for the granting of credit are not favourable, so you find that access to credit for small businesses is very limited.
“So, you need a venture capital fund that are investing in startups that are risking as its business model,” Moghalu said.
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