According to Alex Otti, the governor of Abia State, a major factor contributing to Nigeria’s current economic suffering is a lack of financial discipline.
Member of the National Economic Council Otti revealed that the country’s high cost of living and pervasive hunger are caused by the federal government’s overproduction of Naira currency.
He disclosed this during a recent interview with Channels TV.
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He went on to say that unbridled money printing and spending breeds self-deception in a nation because it doesn’t increase output or the amount of products available for purchase.
“I believe that the majority of the problem we have is financial discipline. We are dealing with an economy where we printed so much money. At the last count, I think, it must be nearing 30 trillion Naira. So, what strictly happened in Ways and Means is that, basket of goods you have available in an economy does not increase with the quantity of money you print.
“So, if you had N100, the basket of goods would be N100. If you tomorrow you decide to print another N200, that same basket of goods will still be worth N300, even though it’s N100, which is a value.
“Therefore, you’ll find out that it doesn’t make economic sense. Maybe, in the short run, you may print some money to fill some gaps, but when it becomes an economic policy where you just keep printing and spending money, you are just deceiving yourself because that does not improve productivity; it doesn’t improve the quantity of goods that you have available within the economy.
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“This is just breaking it down in layman’s language. That’s the major problem we are faced with and that is one of the reasons why we are battling with inflation, unemployment, and all the other problems that we are dealing with,” he said.
Speaking on the exchange rate, Otti argued, “In terms of the foreign currency and exchange rate, that is like everything else. A market functions on the basis of demand and supply. Anytime demand outstrips supply, prices will go up. And anytime, supply outstrips demand, prices will go down.
“So, anything that happens in between, is about the policy options that you have chosen. So, the exchange rate, which in this case is price, going up is because something is happening between demand and supply. Demand is not reducing; supply is not increasing.”
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