.Blames recession on weak regulation

A former deputy governor of the Central Bank of Nigeria (CBN), Obadiah Mailafia, has said 20 per cent of the currency circulating in the country is fake.

He spoke at the National Assembly yesterday while delivering a lecture at the public hearing on the 2017 budget.

Mailafia said it would be impossible to bring down food prices with the fake currency in circulation.

“Twenty per cent of currency circulating in Nigeria is fake; you can’t bring down food prices if you have fake currency circulating,” he said.
 
Mailafia said apart from the foreign exchange (forex) crisis, the refusal of the CBN to effectively regulate commercial banks contributed to the recession.

“I am a former deputy governor of the CBN, so when it comes to regulations, we could have done better. If you have recession, you have to open a situation room where experts will be monitoring the economy daily. These experts will work on ways to get the country out of the situation,”Mailafia said.

He advised the authorities to take steps to prevent the naira from plunging “down forever”.

“If nothing is done, the naira will continue to plunge down forever.

“This is where boldness in economic policy is needed. Though the current administration inherited recession, Nigerians expect them to tackle it. That was what the Obama administration did. We need stabilisation of the exchange rates,” he said.

Mailafia advised that the budgetary process should be structured in a way that would ensure rapid economic recovery.