Ex-Nigerian Finance Minister Kalu Idika Kalu speaks on monetary policy and recession

Nigeria's economy has been a topic of discussion for many analysts and economists, with the country facing challenges such as a drop in oil prices, government revenue, and a recession. Kalu Idika Kalu, an economist and former finance minister of Nigeria, recently joined CNBC Africa to discuss Nigeria's monetary policy and the current economic situation. Reflecting on the economy today and his time as finance minister in the 80s and 90s, Kalu noted that the country is facing similar issues that were prevalent 30 years ago. The key differences lie in the quantitative level, but the core challenges remain the same - managing the exchange rate, mobilizing resources, and minimizing government expenditure. He emphasized the need for a robust debate on monetary and fiscal policy, stating that these measures need to work together to restore balance to the economy. When discussing Nigeria's exchange rate management mechanism, Kalu expressed concern about the government's delay in taking appropriate measures. He highlighted the importance of addressing the issues promptly to avoid further depreciation of the exchange rate. Kalu warned that delaying necessary adjustments could lead to more severe economic consequences, urging policymakers to act swiftly to stabilize the economy. On the topic of fiscal policy, Kalu emphasized the need to cut the cost of governance and make the system more efficient. He called for a restructuring of the tax system and increased revenue generation through various means. Kalu highlighted the importance of accountability and transparency in government spending, urging policymakers to prioritize revenue expansion and infrastructure development to stimulate economic growth. In terms of external borrowing, Kalu stressed the need for Nigeria to borrow strategically to maximize benefits for the country. He criticized the country's aversion to borrowing, emphasizing that borrowing should be evaluated based on its cost and benefits. Kalu urged policymakers to borrow judiciously to meet the needs of the people and drive economic development. Overall, Kalu Idika Kalu's insights shed light on the challenges and opportunities facing Nigeria's economy. As the country navigates a recession and grapples with economic uncertainties, the need for effective monetary and fiscal policies becomes more critical than ever. By addressing key issues such as exchange rate management, government expenditure, and external borrowing, Nigeria can work towards building a more sustainable and robust economy.