Presidential aspirant and former Central Bank of Nigeria (CBN) deputy governor Professor Kingsley Moghalu has said that the 1999 Constitution which places ownership of natural resources exclusively in the hands of the central government creates a dis-incentive for economic diversiﬁcation.
He added that the constitution hampers a regional approach to economic diversiﬁcation and economic management in what is supposed to be a federal state.
Moghalu, a former presidential flag bearer of the Young Progressives Party (YPP) in 2019 expressed these views in a keynote speech delivered during the annual conference of the Nigerian Economic Students Association (NESA) in Port Harcourt, Rivers State, over the weekend.
His paper, entitled: “Economic Diversiﬁcation and the Wealth of Nations: Lessons and the Path Forward for Nigeria”, the presidential hopeful argued for a constitutional restructuring that would devolve ﬁscal autonomy to regions or states which would engender competitive manufacturing and the diversiﬁcation that will drive it.
He said Nigeria witnessed its best broad-based economic growth in the First Republic when resources were under regional control rather than its subsequent boom and bust cycles that were driven by reliance on oil rents.
He proposed that Nigeria’s economic policy makers should help the government develop targeted export policies and incentives that would drive diversiﬁcation, adding that “achieving economic diversiﬁcation in Nigeria would require a comprehensive and joined up approach to economic policy, rather than the silo approach we have seen for many years.”
According to the former presidential candidate, Nigeria cannot achieve development unless it makes economic diversification the central thrust of its policy while recommending a policy based on a clearly deﬁned vision that sets out the balance between the role of the government and the role of the market.
He advised that the Economic Advisory Council to the president would need to become a full-time body because “managing Nigeria’s economy to transformation would require capable hands that work on it full-time, doing the granular work and analysis that will drive policy.”
It is important, he insisted, that such a council, and the rest of the country’s economic management apparatus, acquire and establish strong competence in industrial policy if our economy is to become truly diversiﬁed.
He supported his argument with the models of countries such as Malaysia, Thailand and Chile.
For such an approach to succeed, Moghalu argued, “the two most important requirements, which are lacking in the Nigerian context, are, ﬁrst, a clear philosophical foundation for our country’s economic policy that is based on a clearly deﬁned vision and sets out the balance between the role of the government and the role of the market.”
This approach, he noted, has delayed development because speciﬁc aspects of economic policy appear to be at conﬂict with stated policy objectives of diversiﬁcation.
The former presidential candidate favours a competent political leadership that understands and prioritizes economic development backed by competent economic management and a capable state bureaucracy and not crony capitalism of vested interests.