On Poverty and Price Instability

On Poverty and Price Instability

Postby Richard Akindele » Tue May 16, 2006 9:04 pm

The Central Bank Governor, Prof. Charles Soludo has urged the federal government and states to urgently address the scourge of mass poverty and price instability faced by Nigerians if the nation's democracy must be sustained and stabilized.

Soludo in a lecture he delivered in Uyo, Akwa Ibom State capital said it has been proven that without price stability, no sustainable growth and transformation of the economy can take place hence his warning. The CBN Governor who was delivering the first memorial lecture in honour of Late CBN Governor, Dr. Clement Isong pointed out that "the development of capital and money markets depend much on stable macro environmental long term savings and financial deepening can not thrive in an unstable atmosphere."

"Investors cannot plan in a volatile environment and only speculative, short term investments pay off an uncertain macro environments. Low and stable prices benefits the poor most since they do not have assets that appreciate with rising prices", Soludo posited.The memorial lecture titled "Clement Isong: Enduring Ideas from the Dead Economist" observed that although the former CBN Governor and former Governor of the old Cross River State was dead, his ideas on how toimprove the Nigerian and other economies live on.

Soludo said it was on record that although Dr. Isong was Governor of the CBN during the Nigerian Civil war as well as during the nation's oil boom era, Nigeria did not incur debts of unimaginable magnitude. He said most of the reforms being undertaken by the CBN to transform the nation's economy had since been recommend by late Isong 20 years ago although the governments at the time ignored those noble recommendations which are now regarded as orthodox.

The CBN boss called on the National Assembly to urgently enact the Fiscal Responsibility Act nowbefore the House to enable Nigerian leaders learn toadjust prices, behavioural pattern as well as cultivate the habit of saving for the rainy day. Governor Victor Attah of Akwa Ibom State commended the people of the state and other Nigerians for immortalising Isong and donated N5 million for his endowment fund.

Source: Vanguard.
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