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If I Was President



Dear Speculators,

We can all agree that the Nigerian economy is in a recession. Criticism has been heaped on both the past and incumbent government and lots of opinions on how to resolve the current crisis have poured in from various sources. Here, we describe some of our ideas on creating a working and prosperous economy for Nigeria.

We believe it is necessary we repeal all capital control legislation that prevents the free flow of capital in and out of the country. This will boost investor confidence and we expect a greater volume of foreign capital will move into the country than would leave our shores thanks to zero interest rates and negative yields in Europe and America. The FDI could further be amplified by external borrowings as both the private and public sector seek to take advantage of the 'cheap' money available abroad. Capital account surplus will help augment the value of the Naira. A cheaper dollar will reduce cost of importation and reduce the growth in inflation.

Lower inflation levels will allow the Central Bank to reduce interest rates. Private sector will borrow more at the cheaper rate which will increase local investments in the country. The government can refinance their debt at the cheaper rates and use the savings to invest heavily in infrastructure development.

Technology is key to improving productivity in the country. The government needs to import new equipments and machineries to improve productivity in the public sector. This can be financed by sale of old machineries and running up current account deficit. New debts can be raised from Japan and China who are currently using shady monetary policies to artificially depreciate the value of their currency. The long term savings from borrowing funds from weak currencies will be of sufficient help to a country like Nigeria with a very weak currency.

Through large government spending, efficient collection of government revenue and swift implementation of smart fiscal and monetary policies, economic growth in Nigeria may quickly return to double digits. Nigeria has the potential for rapid development but without guided policy actions, prosperity will remain far beyond our reach. 

Emeka Ucheaga,
Managing Partner, 
Emeka Ucheaga Advisory 

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