Governor Charles Soludo of Anambra State has said Nigeria’s recent macroeconomic reforms have created a more stable environment for investment and borrowing, noting that the country’s economy is now in a better position than it was just a few years ago.
Speaking at an economic conference, Soludo said he agreed with the Minister of Finance and the keynote speaker that, “from a macroeconomic standpoint, Nigeria has stabilized and is on the rise.”
Addressing another governor’s remarks about not borrowing, Soludo said, “You and I are on the same page. I haven’t borrowed a dime since I became governor. But I will hesitate to make the other one that you added, which is that you will never.”
Explaining his position, he said “When I became governor, I pulled Anambra State out of an ongoing World Bank loan. Anambra was the only state that pulled out. Why? Because the macro fundamentals, the foreign exchange, the exchange rate distortions, were such that I told the World Bank that even at zero interest, it was still the most expensive fund in the world.”
He explained “If you were giving me money, and I changed it at ₦460 to the dollar today, when I know that tomorrow it will be over ₦1,000, even if you lend it to me at zero, the effective interest rate in it is over 100%. And so that’s why Anambra pulled out.”
According to Soludo, the situation has since changed, making the country’s economic environment more favourable.
He stated that the country now has stronger external reserves, saying, “You now have net foreign reserves of a little over $40 billion and gross reserves of about $52 billion… and the exchange rate has become more stable, more predictable, to a large extent.”
The governor stressed that Nigerian states would continue to require foreign capital for development, adding that the current macroeconomic environment is now much more conducive to attracting such investments.
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