Mr. Jimoh Ibrahim, has advised the Federal Government to devalue the naira in order to mitigate the impending global financial crisis projected to occur in 2014.
Speaking at the Obafemi Awolowo University, Ile-Ife, where he donated a multimillion naira postgraduate college building complex named after him, on Thursday, the Group Managing Director of the Energy Group said the entire world will witness real financial crisis in 2014 up till 2018 – owing to financial meltdowns in some economic sectors of Britain, United States of America and other parts of Europe.
Ibrahim said a slide in home equity investment in the US and indebtedness in British banking sector coupled with two per cent recession in France and economic challenges in other parts of Europe posed a real threat to global economy.
“I know that my suggestion will raise criticisms. Some people will query why I am saying this. But the entire world is in financial crisis. The financial crisis will start in 2014 and it may last till 2018.
“The housing sector will be affected in the US and many banks will go under in Britain. We are looking at how the US is going to react to all this,” Ibrahim said.
Ibrahim cautioned the Federal Government against assuming a self-sufficiency profile that would give a wrong signal to donor agencies that all is well with the country.
He also advised the government to ensure that “no bank in the country goes under,” adding that “the private sector should be encouraged to create jobs.”
“The Federal Government should mitigate capital flight. There is the need to encourage investors to spend their money in the country.”
Ibrahim noted that a foretaste of the financial crisis was already manifesting in Europe and the US with laying off of thousands of workers, urging the Federal Government to take proactive steps.
Recalling that the projected budget estimate of the Federal Government stands at N4.8trn, Ibrahim said N2.7trn of the budget would be spent on recurrent expenditure while N1.7trn would be used as petroleum subsidy, and N800bn would be left for capital expenditure.
The business mogul therefore warned that if the country’s budget witnessed a 25 per cent budget slide, “there will be no budget to pass down.”