A former Deputy Governor of the Central Bank of Nigeria, Dr. Obadiah Mailafia, has revealed that 20 per cent of the currency in circulation in Nigeria is fake.
Mailafia made this known during a public hearing on the 2017 budget.
He also warned that economic disaster looms over high interest rate.
This is just as a coalition of civil society groups under the aegis of Citizens Wealth Platform declared that result of its dissection of the N7.289 trillion budget proposals shows that about N151.536 billion of it are frivolous.
Mailafia said it was saddening that the concerned authorities appear to be oblivious of the gravity of fake currency in circulation, which he noted was highly detrimental to the growth of the economy.
According to him: “When fake currencies of that magnitude circulate, original currencies become scarce.
“Bad money chase away good money.”
Mailafia described recession as a situation where the Gross Domestic Product output falls more than two quarters, while he said recession is a situation where GDP growth falls for more than five, six and seven years.
He attributed the current recession in Nigeria to a myriad of factors such as global fall in the price of crude oil, dwindling foreign reserve, weakening of the Naira, negative growth and existing gap in public policy.
He also fingered the current recession to be as a result poor banking practices, stock market crisis, speculations, regulatory failure, corruption, fraud and weak macro-economic management.
Mailafia warned against increasing tax, suggesting that the Federal Government should rather drive for more income tax by getting more people to pay instead of increasing it because it will further compound growth and investment.
He advised President Muhammadu Buhari to stop giving excuses on current economic problems in the country because the buck stops on his table.
He therefore implored the legislature and the executive to deploy the current budget process to stimulate the economy, focus on factors that can rejuvenate growth, stabilise the exchange and interest rate and provide a stimulus package that will ensure a synergy between the economic growth and budget package.
Mailafia said it was unfortunate that the CBN allowed the MMM initiative to operate in Nigeria, a situation which he noted could be further detrimental to an already crippled economy in view of Nigerians’ gross involvement in the ponzi scheme through withdrawal of monies in the bank and subsequent investment in the scheme.
He described it as risky for banking business.
He further advised the government to reposition key institutions, invest in key infrastructure that can create employment to teeming youth on the streets, re-invent railway operations and reduce taxation.
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