Recently some Nigerians, especially regime supporters, were gushing with excitement that the value of Naira has been on the upwards swing in relation to the United States Dollar, the British Pound Sterling, the Euro and other global currencies. The premise of the celebrations on the perceived strengthening of the value of the Naira is wrongheaded. And some of them know it.
But they are essentially motivated by the desire to taunt critics who they regard as prophets of doom. And those who do not wish Nigeria well because their preferred candidates were not declared winners of the February election.
The celebrators of the mirage of the strengthening Naira value come from the standpoint that other Nigerians hold the extant regime wholly responsible for the fate that has befallen the Naira. That cannot be true. But the reality is that the value of our currency has not been done any perceptible good by its sudden floating a few months ago. However, what cannot be denied irrespective of where we stand in Nigeria’s increasingly toxic political divide is that the precipitate flotation of our currency by the regime of Alhaji Bola Ahmed Tinubu, Nigeria’s President, has not helped to address the woes of the Naira. It has indeed made the situation worse.
The problem that some critics, including yours sincerely, have with this regime is what appears to be its proclivity or tendency to act before thinking through any policy. And we are being generous by clothing some of the things they have been doing as policies. No, they are not, strictly speaking. Some of them are knee- jerk programmes informed by the cravings to project courage. And boldness. The expectation is that a prospective policy will be preceded by deep thoughts, wide consultations with relevant critical stakeholders and the incorporation of relevant inputs, projections about possible deleterious effects, remedial solutions on need basis, timelines and benchmarks for measuring successes and/or failures, and Plan B if a pull back is inevitable. l do not think this regime acts in this manner. If it does then its policy or working papers must be likened to Malawi’s Constitution under the late dictator, Dr. Hastings Kamuzu Banda.
Legend has it that under the Prime Minister and later President, Banda [1964- 1994], the Malawi Constitution was a state secret. The contents were only known by the former President and the cabal in the presidency. Any ordinary folk who quoted any section of the Constitution was treated as being in violation of state secret and liable for arraignment on charges of treasonable felony or even out right treason. It was alleged that no Malawian was free to talk or speculate about the age of Banda, whether in public or in private. To do so was regarded and treated as a crime. l do not think that the thinking, deliberations and documents that underpin the ‘policies’ of this regime have degenerated to be likened to what happened in Malawi under Banda. Ironically, there may indeed be no documents to back the Naira flotation and petrol subsidy removal because at the time of their pronouncements by the President the federal cabinet had not been constituted and the ousted central bank governor was still in jail.
Just like the floating of the Naira was a product of the spur of the moment, the removal of the so-called petrol subsidy was a project and not a policy. A policy would have envisaged the glaring and inevitable negative impacts of the sudden removal of the alleged petrol subsidy and made provisions for the mitigation of the inevitable painful fall outs. The negative impacts of the combined effects of the flotation of the Naira and the petrol subsidy removal can be captured in one phrase- Cost of Living Crisis. It is instructive that this cost of living crisis was contrived by the regime and it compounded the problems of a country that was already designated as the poverty capital of the world. In Igbo it was akin to putting ‘akwu rere ere n’ime ikwo puru epu’. l do not know the English language equivalent but the closest that comes to my mind right now is ‘jumping from frying pan to fire’.
The greater tragedy is the rationalizations for the patently poor choices by the regime. Some of them are that the choices were driven and imbued with political will and courage and that the country would have collapsed under the weight of its many contradictions if the decisions were not made and actions taken. Those are scare-mongering balderdash.
The country is worse for it in spite of the claims by this regime that the excruciating pains Nigerians are passing through are temporary and that you can’t make omelette without breaking eggs. Where we are headed we may find out sooner than later that we will end up breaking all our eggs without having a ready to serve omelette. As at the last count, and that was last year, the National Bureau of Statistics [NBS] had reported that about 133 million Nigerians live in dimensional poverty. Even this figure must have been conservative. And recently the World Bank projected that by 2024 no less than 27 million Nigerians will have to contend with starvation partly on account of the combined effects of the so-called progressive policies of this government.
But in spite of the dire prognosis, the ruling elite are insistent in indulging their hedonistic appetites by appropriating billions of Naira to renovate largely idle official mansions, take delivery of a presidential luxury yacht without appropriation and procure foreign sport utility vehicles [SUVs] for the President, the Vice President, 469 national assembly members, and for the occupant of another office which is not known to any law of the land- that of the first lady. The profligacy included spending over $500 USD by the regime for a one week hotel stay in New York by the President and his team in September.
By its spending priorities the regime undermines its claims that the country has revenue problems. And it also strikes a dagger at the heart of the value of the Naira.
When the Naira was floated part of the reasoning was to remove arbitrage by narrowing the rate gap between the official and unofficial markets. But it is doubtful that the government considered the supply side challenge. In addition to the supply side headache, the central bank has an unmet foreign exchange obligations estimated at $10 billion. That is a steep climb and it makes the optimism about the Naira strengthening in value in the short and medium terms totally misplaced.
What is needed is a long term plan and that is not the forte of many politicians with eyes on the next election. Agriculture remains our best bet to help recover the value of the Naira. But there is a snag.
Terrorists and herders have driven people away from the farmlands. So a serious government will pay attention to security issues. It must be admitted that it will take an effort to recover the country from bandits, kidnappers, sectarian insurgents and terrorists and then build confidence for farmers to go back to business. And before cash/export crops are ready, government would have addressed the bottlenecks in the export sector. For instance, a study has shown that it takes three days to package yam tubers in a forty-foot container for export in Ghana while the same takes more than 70 days to accomplish in Nigeria. As would be expected our yam tubers get rotten before the containers arrived their destinations in Europe, the Americas and Asia.
We produce and export crude oil but we consume 100% imported petroleum products. We have four refineries. All of them moribund. How else do you define madness? And for now Nigeria appears to have happened [read: a peculiar affliction] to a private refinery being promoted by Alhaji Aliko Dangote so much so that the take-off date has become a puzzle. The refinery was commissioned in May.
Finally, our obsession with Naira versus Dollar rate is a misnomer. In fact idiotic. Two days ago, one USD exchanged for about 152 Japanese Yen. And l do not know that the Japanese fret over the gap between the Yen and the dollar. In fact, all my adult life l do not recall the Japanese currency trading anywhere below 100 Yen to one USD. Japan is an economic power which is not endowed with natural resources. For them low exchange rate is cultivated. So our focus should be to make our economy productive; gradually become key players in the value chain of our God endowed natural resources instead of net exporters in their crude form; and minimize corruption in our processes. But the efforts will not get off the ground if our country is not energy sufficient; if we do not reform and refocus the civil/public service; and, if elective political offices remain the easiest routes to wealth without enterprise.