There have been a culmination of lax in the financial knowledge of our leaders and thus creating problems for the economic situation of the country. The current economic rate at the money market is too much for a grown-up country, as it ends up putting the government in a prosperous debt, or simply put economic bondage
But how do we have to blame the government for borrowing with double-digit interests instead of a standardized single-digit interest? And the reason why the federal government under President Muhammad Buhari should considering raising money through what is called ‘Crowding Out’; a situation where the federal government borrows money at the market at a high rate, thereby making the cost of borrowing more expensive than others, including the state and local government.
As critical as our economic situation is, there is a need to take solace in the fact that, our population is relatively young, and borrowing at a lower rate may be effective than a higher rate in which the situation is present. But, the agricultural sector needs to be more funded to ensure food security at this critical time. Why that was the fact that, once the society can conveniently feed themselves, then, the modern financial practices to generate money can be effectively implemented without any problem, quantitative easing in this perspective.
The quantitative easing of economic is the process where the finance ministry in connivance with the Central Bank of Nigeria (CBN) prints money to fund government obligations, but can the country print money now? It will be counter-productive, as our production base is very low. Quantitative easing is the smart money, and not necessarily free money, as when the government prints money, it will expand the CBN assets, and invariably, liabilities. But through the expansion of the asset, the government can sell bonds to commercial banks at low interest, and these banks, in return will lend prospective investors rates that will be affordable. The modern economic practice dictates that, and it saves our world from financial ruins during the economic crises of 2007/2008.
The program is not fool-proof, because the implementation of the program will rig to benefits big money and corporations. It will be the best hope for the country and President Buhari as the sitting president needs to take care of the reality, Nigeria cannot survive without quantitative easing, and how are we going to do it without triggering inflation should be next line of assessment. This is not the time for politics, but, time to come together and save the country from drowning.