Nigeria’s former Finance Minister and Coordinating Minister for the Economy, Ngozi Okonjo-Iweala, has stated that growth and development cannot be achieved in any country that has loopholes in its foreign exchange rates.
She made this statement at a time Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, promised that the nation’s ailing economy will be out of recession by the end of the third quarter of 2017.
Speaking after the Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, Emefiele said the CBN will not dictate where the much-needed foreign exchange convergence will be, but hopes the rate will head southwards rather than remain on the high side.
But the former World Bank Managing Director who spoke at the launch of ‘Beating the Odds: Jumpstarting Developing Countries’, a book written by Justin Yifu Lin and Celestin Monga in Ahmedabad, India, said there was no one way to growth and development, for any economy without putting some basic principles in place.
“You can have development that takes specific country and context specific situations in hand and begin from there,” she said.
“So, the proposals for industrial parks, industrial zones or what you want to call them as a way of kicking off development in a country fits within this context. For me, I think we should just absorb the lesson that there is no one correct answer to economic growth and development. There is no one path.
“There are some specific and fundamental principles that are important, which, if you do not observe, you will not take off. And I think, even with this, you would agree; if your prices are not right within the economy, it is still not going to work.
“And when I mean prices, I think like, if you have a distorted exchange rate regime, if you have very severe distortions within the economy, that are fundamental to macroeconomic stability, it is not going to work.
“So we can outline those principles, and say you need to observe certain principles; these are not conditionalities or 450 prescriptions we are talking about. They are just certain basic principles that underpin development,” she said.
The former Minister said the state also has a major role to play in achieving economic growth and development, emphasising that not all can be left to the market to do.
“We forget that even in those countries where the economic theories we are expounding were born and are being practised that there is an acknowledged role for the state.
“That there are market imperfections and failures, where we have to call in other instruments other than the market. These are things we need to bear in mind”, she said.