There are two principles that govern economics within an economy, if we transgress on the first one, we will bound to pay direly for our actions in future and that is what is happening in Nigeria today.
* A country must not spend but save and pay off debt when the economy is at its potential and spend when the economy is below potential to bring it back.
* Any policy, either fiscal or monetary taken by a government to push the economy back to it's potential will not yield results until 6-8 quarters, which is a year and half to two years in a developed economy because they have less shock and might take up to 12 quarters ( 3 years) in a developing economy like Ours because we have more shocks.e.g lnflations, Exchange rate, Civil Unrest etc.
1999, OBJand his economic team who understands economics principle followed it in managing the economy. 1990 - 1999, Nigeria's Economy only grew at 2% annually making it the worst economic period for Our Country, by 1999 when Gen Abdusalam handed over to OBJ, Nigeria had only USD 4 billion in its foreign reserve, but when OBJ left office we had USD 60 billion in foreign reserve and another USD 40 billion in Excess Crude oil account. OBJ and his economic team through their economic policies decided to diversify the economy moving it away from the mineral resource sector. Nigeria's economy grew shifting from below potential to potential and grew annual average of 8.92% between year 2000 and 2007 and then our economic growth was next to China & lndia in the world.
Though His policies may not be popular to the people, OBJ decided to save and pay off foreign debt rather than spend which means, Nigeria have money to spend to put the economy back to potential when the economy is bad and secondly it has reduced or pay off Our debt, then majority if the money can go into Capital Expenditure, in the form of stimulus to jump start the economy rather than using it to service debts.
RPI.................... Mission Rekindled.
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