A former Minister of Finance and National Planning, Dr. Kalu Idika Kalu, has urged the Federal Government to work on how to cut the cost of governance as a measure of curbing the rising inflation in the country.
In a telephone chat with Saturday Telegraph yesterday, the former minister also urged the government to prioritise increased spending in agriculture and other productive sectors of the nation’s economy as a way of stimulating growth in the nation’s economy.
Dr. Kalu who was at various times minister in charge of various portfolios such as Finance, Economic and Transportation also faulted the notion that the various multilateral borrowing institutions are working against the progress of the country.
Currently, the National Bureau for Statistics has pegged the nation’s inflation rate at 34.19 per cent, prompting stakeholders in the country to urge the government to take drastic action to curb the rise owing to the likelihood of mass anger and civil unrest that it would arise.
Nigerians have been lamenting the huge cost of goods and services, particularly food items which have skyrocketed and are out of reach of the common people who are groaning and lamenting their inability to meet their daily needs.
On its part, the Federal Government has rolled out a lot of schemes to cushion the effects on the people.
The President Bola Ahmed Tinubu-led government had recently distributed foodstuffs such as grains and cereals to the 36 states of the Federation just as it had also kick started the loan schemes to students in higher institutions.
Commenting on the developments, Kalu urged the government to adopt some measures that would stimulate the economy for possible rebound in the short, medium and long term.
He admitted that he lacked details of the factors driving the inflationary trends, but maintained that though they exist in the fiscal and monetary sides of the economy, the government has to take steps to reduce the bureaucracy with a view to freeing resources for productive purposes.
“What we are talking about is for a review of the sheer size of the public sector, whether in terms of structure or personnel. I think the cursory impression one gets is that we are not paying enough attention to reflect the scarcity of resources in the maintenance and expansion of the public sector.
“The cut back will have to be at all levels; local, state. It does appear that we are not doing enough in this direction, even though this too clearly by those in charge.
“There is the need to allocate resources to sectors that can deliver on short term basis, that would directly give back the production of food from
“Generally, the government has to cut its expenditure drastically. It also has to cut administrative expenditure drastically. The cost of governance has to be reduced.
“By the same token, allocations to the productive sectors have to be improved, so that resources are being developed in the agriculture sector, in the transport sector and of course in the productive sectors, I mean other non-agriculture sectors,” the former minister said.
He added that the government must improve financing drastically in agriculture and other productive sectors with a view to addressing the gaps in the allocation to the productive sectors of the nation’s economy.
He called for greater engagements with the numerous lending multinational institutions with the aim of securing funding for productive sectors.
“Government needs to secure increasing allocations from such institutions like the IMF, ADB and the World Bank. Those multi-laterals are there to help us and we have to adhere to the policies that improve the efficiency of using those resources,” he said.
He maintained that these institutions provide the cheapest form of financial assistance window the country can tap from, compared to other windows both domestic and international.
The former minister urged decision makers to de-emphasise their reservations for these agencies, saying “For too long, we have continued to see these multinational institutions as inimical to our problems instead of utilising the windows of development that they offer.”
