Former Finance Minister, Mrs Ngozi Okonjo-Iweala, has said growth and development would not be achieved when a country has distortions in its foreign exchange rates.
Speaking at the launch of ‘Beating the Odds: Jumpstarting Developing Countries’, a book written by Justin Yifu Lin and Celestin Monga in Ahmedabad, India, Okonjo-Iweala said there was no one way to growth and development, if some basic principles were not in place.
She said: “You can have development that takes specific country and context, specific situations in hand and begin from there.
“So, the proposals for industrial parks, industrial zones or what you want to call them as a way of kicking off development in a country fits within this context.
“For me, I think we should just absorb the lesson that there is no one correct answer to economic growth and development. There is no one path.
“There are some specific and fundamental principles that are important, which if you do not observe, you will not take off. And I think, even with this, you would agree; if your prices are not right within the economy, it is still not going to work.”
““When I mean prices, I think like; if you have a distorted exchange rate regime, if you have very severe distortions within the economy, that are fundamental to macroeconomic stability, it is not going to work.
“So, we can outline those principles, and say you need to observe certain principles; these are not conditionalities or 450 prescriptions we are talking about. They are just certain basic principles that underpin development.”
She said the state also has a major role to play in achieving economic growth and development, emphasising that not all could be left to the market to do.
“We forget that even in those countries where the economic theories that we are expounding were born and are being practised there is an acknowledged role for the state.
“That there are market imperfections and failures, where we have to call in other instruments other than the market. These are things we need to bear in mind.”
Okonjo-Iweala said many people do not know the President of Switzerland, but noted that investors and individuals from all over the world trust the Swiss with their monies because the nation had built institutions bigger than the President.
She called on African nations to build institutions rather than personalities.