By Chimezie Godfrey
Economist, Dr. Paul Alaje, has cautioned Nigerian politicians against the reckless use of foreign exchange, especially during election seasons, warning that such actions have direct implications on the nation’s economy.
Alaje gave the warning at the sideline of a two-day Business, Economy and Financial Reporting Training organized by the Premium Times Academy in Abuja.
He said: “Let politicians, 30 states conduct elections, and share dollars to their delegates. You will feel it in your house.
Economy is real. It’s not wishful thinking. I don’t have a problem with you giving your delegate anything.
”As an engineer, I’m saying spend our local currency so that the Central Bank can manage you. But when you now go out of that and start spending from our reserve, that is the challenge.”
He argued that excessive dollar spending during elections often leads to foreign reserve depletion, exchange rate instability, and long-term inflationary pressures.
On the need for policy advocacy, Dr. Alaje stressed the importance of fiscal discipline and legislative oversight on borrowing and expenditure.
“We should not use more than one-third of all revenue to service debt. Maybe when next year comes, government will look at other revenue windows that may boost income compared to what we are spending to service debt,” he said.
According to him, Nigeria’s average debt growth over the last 15 years stands at 20 percent, while GDP growth lags below 3 percent, showing that borrowed funds have not significantly improved economic productivity.
He observed that much of the borrowed money goes into administrative and recurrent expenditures instead of capital projects, noting that this trend limits real economic impact and infrastructure expansion.
“If a sub-national or the federal must borrow money, such money must go straight into capital expenditure — projects that are already considered by the National Assembly.
”Borrowing just because we feel we are not able to meet budget targets means we are borrowing for consumption, not production,”Alaje advised.
Dr. Alaje urged both federal and state governments to channel future borrowings into critical infrastructure such as roads, rail, and energy to accelerate Nigeria’s development.
He also called for regional economic specialization, urging each geo-political zone to focus on distinct productive strengths to spur inclusive growth.
On Nigeria’s economic projection, he noted that achieving a $1 trillion economy by 2030 would require consistent 15–17 percent growth, made possible only through prudent investment of borrowed funds in productive sectors.
Reflecting on election-year spending trends, the economist said:
“Since 1998, I’ve tracked money spent on elections. Dollars started flowing into our economy heavily around 2006, and the worst years were 2010, 2014, and 2023. All of these have impact. After the election year, go to the next year and see what happens — the economy starts nose-diving.”
He advised that the INEC and National Assembly should make it compulsory for all campaign and political spending to be done strictly in Naira, with the EFCC empowered to monitor and enforce compliance.
“If this is done, for the first time in a long while, Nigeria will experience post-election economic stability,” Alaje stated.
Dollar Politics Worsening Nigeria’s Economy – Economist Warns Politicians
