By Omoh Gabriel, Business Editor
Managing Director/CEO Global Fleet Energy and Chairman NICON Group, Barrister Jimoh Ibrahim has insisted on his call on government to print more naira saying that Nigeria should print more of the local currency to meet the present need of the country arising from the short fall in the federation accounts. Speaking with Vanguard the business mogul said it pitiable that the Central Bank of Nigeria is saying that his call is laughable because it has run out of ideas. This is an unusual situation that requires confrontational approach to resolving it. He said at the January federation account allocation committee meeting, only N100 billion was available for allocation to the three tiers of government instead of the average N400billion monthly allocation. What I propose is that in that instance the short fall should have been printed, that is about N300billion. What Nigeria needs at the time is spending more by bridging the financial gap through printing more of the local currency. Jimoh Ibrahim had two weeks ago urged President Umaru Yar‚ÄôAdua to print and circulate more naira to get the country out of its present financial predicament.
Speaking with journalists in his new offices at 156 Broad Street, Lagos, Barrister Jimoh Ibrahim said ‚ÄúI strongly advice the Federal Government at this time to look at the possibility of printing Naira notes as an urgent solution to the recession. If the naira is printed, its cost of printing will be reasonable as to the cost of depleting the foreign reserve or supporting domestic spending through foreign reserve withdrawal.
‚ÄúIf you print our naira now, we would be able to fund government spending, fund infrastructure and fund the seven-point agenda. Definitely, printing naira notes will cost inflation; this can be controlled by Treasury bills to mop excess liquidity.
‚ÄúPrinting naira notes will reduce interest rates, will increase liquidity, while banks will be well funded so as to fund companies. Properly funded companies will not cut jobs, they will reduce unemployment, they will fund capacity utilisation and by extension, spending habits will be promoted and this will lead to good activities at the stock exchange. I know there will be inflation as a challenge but it can be controlled by treasury bills.
‚ÄúIn my view, it will be better to control inflation than to keep spending government reserves. Government is the largest spender in our economy and the moment government stops spending, the economy stops performing. Cutting domestic spending as per federation account by 34% will lead to more pains and aggravate recession. We cannot afford to stop projects and development programmes; particularly the seven point agenda, good roads and infrastructure including power.
‚ÄúPrinting of naira at this time is a confrontational approach to recession. When every sector of the economy (private and public) is active and spending is persistent, recession disappears. At this time, oil is expected to be giving us the highest returns. But if it fall short of that, it is better to project realistic solutions than manage our insufficient reserves.
‚ÄúI do not think that the United States has not started printing Dollars; I have my doubts if they are not doing so already with interest rates of 0.5% as compared with Nigeria‚Äôs 22% and that of 1% in England. I do not think the Central Bank of Nigeria has ever thought of any realistic solution at this time. To run away from obvious fact is more dangerous. If you cannot manage recession you will go into depression.‚Äù
Jimoh Ibrahim call has elicited debate from the Nigeria public with many denouncing the call while a few has supported the idea.