Chuks Okocha and Adedayo Akinwale in Abuja
Peoples Democratic Party (PDP) governors have defended their colleague, Governor Godwin Obaseki of Edo State, over his comment that the federal government printed N60 billion to top up the March Federation Allocation, saying that the governor merely offered a piece of informed advice.
In a statement yesterday by the Director-General of the PDP Governors’ Forum, Hon. Cyril Maduabum, the governors said they were alarmed at the partisan slant a patriotic advice to the federal government by Obaseki, on its monetary policies had assumed.
The All Progressives Congress (APC), however, dismissed the furore over the resort to ways and means to finance government operations, explaining that there is nothing wrong with printing money as long as it is well managed.
The PDP faulted the APC Progressive Governors’ Forum (PGF) statement that Obaseki’s claim did not reflect the true position of things.
The APC forum, in a statement by its Chairman, Governor Atiku Bagudu of Kebbi State, said at first, the impression it got was that it was an off-the-cuff remark made in a private meeting, but “we were, however, shocked to see yet another response from our colleague to the rebuttal by the Minister of Finance, insisting that the March 2021 FAAC was augmented via the printing of money.”
However, the PDP governors said: “It is unhelpful for the APC Progressive Governors Forum to join the fray in the manner it did by its recent statement attacking the bona fides of Governor Obaseki who merely warned the monetary authorities about the danger of uncontrolled use of ways and means, that is, the printing of naira, to support government’s expenditure.”
The PDP governors stated that Obaseki has a background in economics and finance and he is a responsible governor who talks in a measured way.
The governors said Obaseki’s position, reportedly corroborated by the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, and an international ratings agency, Fitch, and should be heeded rather than being crucified for warning the nation.
“No doubt the federal government has been supporting the states in the area of agriculture, budget and refund of federal government executed projects by states and a few other areas of intervention,” the PDP governors said.
They, however, wondered whether the CBN was being vindictive over Obaseki’s comments by its demand for the repayment of budget support facility granted the states in 2015.
“Is CBN trying to be vindictive and vengeful by recalling its loans to the states because of informed advice by a governor? It is unfortunate that governance has plummeted to this level,” it added.
The PDP governors urged the federal government to plug financial leakages in the system and curb wasteful expenditure on projects that could be executed by the private sector.
The governors said that relying on ways and means by the CBN brought pressure on the naira with its inflationary consequences.
According to the governors, inflation in Nigeria is currently at 18.2 per cent, the highest in recent years.
“We should all be concerned to find ways of stemming the tide. We are all involved in the urgent task of rescuing the economy of Nigeria and nobody should indeed play the ostrich, “the governors said.
Meanwhile, the APC has said that there is nothing wrong in printing money provided it is well utilised.
The National Secretary of the Caretaker/Extraordinary Convention Planning Committee, Senator John Akpanudoedehe, in a statement yesterday, said whether or not the CBN printed money, was not an issue, saying the apex bank should be allowed to perform its mandate
According to him, central banks all over the world print money.
“During the financial crisis of 2008-09, the Reserve Bank of the US printed dollars to bail out companies that were too big to fail. There is nothing wrong with printing money provided it is well managed,” he said.
Akpanudoedehe said there was no evidence that the CBN was inefficient in managing the monetary aspect of the Nigerian economy.
He added that the CBN is the banker to the government and has exercised such function efficiently and effectively.
He stated that the development function of the CBN has resulted in various intervention funds in several sectors of the economy.
Akpanudoedehe stated that the ruling party inherited an economy that showed signs of a recession from 2012.
He added that the economy left by the PDP had no forex to run the system, stressing that the looting of the commonwealth was unprecedented in history, while productivity was declining.
He said the APC government implemented aggressive fiscal and monetary policies which resulted in the country’s economy exiting recession in 2016.
He urged the PDP to understand how money is created as well as provide evidence showing the composition of M1, M2 and M3 in the Nigerian economy.
“The utterances of the PDP would create problems for the economy. What PDP should do is join hands with the APC to clear the mess they left behind. To destroy is very easy but to build is a task the APC is committed to,” Akpanudoedehe said.