A former Governor of the Central Bank of Nigeria (CBN), Prof. Chukwuma Soludo, has faulted President Muhammadu Buhari’s Treasury Single Account (TSA), warning that leaving huge amounts of idle cash in the CBN at a time the economy is in desperate need of stimulation is poor economics.
Soludo, in a 21-page paper titled: “Can a New Buharinomics Save Nigeria?” he delivered at the third anniversary lecture of the RealNews magazine in Lagos Thursday, stated that: “The Treasury Single Account (TSA) is a great initiative, and I congratulate President Muhammadu Buhari for that. However, we don’t have to return to the past of having every penny of government lying largely redundant in the central bank.”
He pointed out that in an economy desperately in need of stimulation, piling up idle cash at the CBN was not sound economics, just as he advised that the government should deploy technology and transparent rules to implement a hub and spoke model of TSA whereby CBN is the hub while the commercial banks remain the spoke.
“Of course there are some benefits of keeping it at CBN, including possible anti-corruption outcomes but as a proverb says, you don’t set your house ablaze because of the irritation of a rat in the house. We can rid the system of corruption and realise all the benefits of TSA but still not starve the economy of the necessary liquidity,” he said.
On the fuel subsidy regime, Soludo he called on Buhari to exercise the “moral authority and legitimacy” to quickly remove fuel subsidy and privatise the country’s refineries.
He argued that, “If Buhari does not deal with these issues NOW, I wonder when, if ever. Now that private refineries are coming up, it is time to privatise public ones. It should have been done years ago. The huge benefits are not only economic, but also an anti-corruption move.
“Let government produce a credible agenda of reforms for the sector and let us have another focused public debate on this subject.
“You may be amazed that even the so-called ‘man in the street’ now understands that it no longer makes sense. The fiscal cost of keeping it is unjustifiable and unsustainable.”