Macroeconomics Policy and Sustainable Development in Nigeria

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MACROECONOMICS POLICY AND SUSTAINABLE DEVELOPMENT IN NIGERIA INTRODUCTION

In normal economic condition, macroeconomic policy drivessustainable development of anation. The two main branches of macroeconomics policies are based on monetary and fiscal economics. Central Bank, the nationalapex bank controls the monetary policy while the Ministry of Financeplays major role in national fiscal policy. However, most economists concur that, synergy exists between micro-and macro-economics variables and two policy agents of government: the CBN and Ministry of Finance determine the success or the degree of sustainability of macroeconomic development.In support of theimportance of central bank in macroeconomic policy, Ampong(2005) posits that non-artificial central bank independency has beena source of great success for the management and stabilisation of macroeconomic variables in countries like Norway, Sweden, Israel, Iceland, Denmark, New Zealand, United Kingdom, etc.In essence, there is theory gap among economists onthe level of central bank’s independence, especially in developing economy such as Nigeria where there have been constant agitating for curtailing of the CBN’s autonomy. Nigeria economy has passed many phases since the introduction of SAP by Babangida Government in 1986.The Abacha Government came up with Vision 2010, the Obasanjo with NEEDS, the Yar’dua with Nigeria Vision 20:2020 and presently, the Jonathan’s Transformation Agenda.From 1986, Nigeria had total of four CBN Governors plus the incumbent, MallamSanusiLamidoSanusi. CBN Bulletin (2011) enumerated policy contents of SAP with major objectives to remove the controls of interest rates, enhance the institutional structure and supervision. Most importantly, to strengthen the money and capital markets through policy changes and distress resolution measuresand to improve the linkages between formal and informal financial sectors. The removal of the control of interest rate through inflation targeting is somewhat the main focus of SAP. The concernsof the financial operators, the real sectors managers, the economists, and the policy analysts are the effectiveness of macroeconomic policy instruments of the CBN and the Ministry of Finance. Then, the impact in GDP growth rate,the stability of macroeconomic variables and the economic growth policy sustainability.In essence, citizens want to see how growth in GDP results to increase in employment, equal distribution of wealth, enabling business environment, and improvements in Human Development Index(HDI). National Bureau of Statistics, NBS (2013) data presents positive outlook of the annual macroeconomic variables in Nigeria as reported by CBN. From 1980 to 2012, the data depicts constant increase in GDP Growth Rate,stable money supply, controlled inflation Rate, favourable interest Rate, etc. The Monetary Policy Committee(MPC) has maintained interest rate at double digits since 2009.

Many economists and policy analysts question the integrity of NBS macroeconomic data and the CBN reports on the state of the economy. Ojomaikre(2012) questions the rationale of a statement he accredited to Nigeria’s Finance Minister,NgoziOkonjo-Iweala that Nigeria is one of the fastest growing economies in the world. Ojomaikre argues that Nigeria is not growing but broke. He asserts that government survey found out that, unemployment had increased across the country and was higher in rural than in urban areas.Similarly,he argues that the absolute poverty level had leapt from 54 per cent in 2006 to 70 per cent in 2010. The contradictions and argumentsregarding the growth of Nigeria economy and sustainability continue unabated.Obafemi(2013) supports some policies already implemented by the CBN in the last few years. He, however,questions the effectiveness of these policies in achieving the desired results and their sustainability. Sustainability in his opinion is about policy reversals when the present CBN Governor leaves...
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