By Ola’ Idowu
The ongoing economic and social crisis due to the artificial crash of the Naira against the US dollar has left the country in a quagmire we need to get out of from quickly so as to put the forces of darkness to shame.
It is absolutely possible to make the Naira at par with the dollar and recalibrate our economy to it’s true value, as the present economic problem the country is experiencing is a culmination of three decades of ruination of the Naira and presently deliberate sabotage of the exchange rate by unpatriotic forces who have turned forex exchanging into a major business industry in the country. The major problem the Naira is facing is the issue of Round-tripping, a situation where people buy the US dollars at either official rates or at a certain price on the parallel market, hoard it for as long as they can and then wait for the price of the Naira to depreciate against the Dollar before releasing it and making a big kill against the national currency.
This is one business that was restricted to looters of the nation’s commonwealth, their cronies and bankers for many years but has now become an all comers affair in Nigeria. Retired and still serving civil servants, soldiers, doctors, business men and women, bank officials, CBN directors, portfolio foreign investors, unscrupulous foreign businessmen, Multinationals, professionals, students, Nigerians in the diaspora and indeed anyone with families abroad have all joined the round-tripping business and made it a sector of it’s own in Nigeria albeit an illegal industry that distorts our economy, creates inflation , a desperation for the dollar and market inefficiencies.
Three decades of mismanagement of the Naira by the CBN starting from the SAP era of 1986 has led us to having a currency whose value has become unstable and not strong enough to be a store of value for its holders thereby making the Naira lose its dignity and respect. It has led to massive brain drain in the country (asides from the issue of unemployment and underemployment) as more people would prefer to have families abroad who can send them dollars and other foreign currencies which are better store of value against the Naira. It also means politicians and thieves of our commonwealth would rather prefer to change the Naira into foreign currencies like the Dollar to loot it into their foreign accounts and only exchange it back into Naira when they feel it has devalued well enough. This leads to excess liquidity in the system as we’ve always had a system where so few a Naira is always chasing these scarce and rare commodity called the dollar in our country.
The CBN from the SAP era has tried everything from Second-Tier Foreign Exchange Market (SFEM) to Inter-bank Foreign Exchange Market (IFEM), Autonomous Foreign Exchange Market (AFEM), Retail Dutch Auction System (DAS), Wholesale Dutch Auction System (WDAS) etc. all to avail, due to the fact that we have made it more attractive to hold on to the dollar as currency of option rather than making the Naira more attractive considering it is our legal tender in the country. Too often we’ve been told our exchange rate is determined from the amount of foreign reserves we have built, but that is a big lie.
The late General Sani Abacha managed to keep an official exchange rate of N22 to the dollar for years though he met a foreign reserve badly depleted by IBB to about $486 million and was under foreign sanctions too. At moments when the price of crude was high and our foreign reserves also high, the foreign exchange never went down to any appreciable level instead it has kept going up deliberately to satisfy the Round-tripping industry that many unpatriotic Nigerians are involved in. To be honest, for some Nigerians they are just taking advantage of a loophole they did not create themselves, and even the Pope would find it really tempting not to engage in a business so easy like Round-tripping that courtesy of IBB’s devaluation of the Naira and subsequent years of mismanagement by the successive governments and the CBN has led to a big albeit illegal industry, whereby if you are good at speculating like the stock exchange you would make a kill at regular intervals.
At the moment, the present dollar paucity is a deliberate hoarding by anti-government forces who together with their foreign collaborators would like to undermine the President Buhari government and bring about the kind of situation (social-economic crisis) in Venezuela that at a time forced out a popular leader like late Hugo Chavez and is currently giving his successor Nicolas Maduro a tough time so much the opposition has won a majority in their National Assembly for the first time in many years. Knowing Nigeria is import-dependent and mono-product export-dependent like Venezuela, they have mopped up the dollars in the country and hoarded it thereby crashing the Naira and hoping the government devalues. These same forces do sensitize themselves and fully circulate information amongst each other. Thus when Nigerian business man Ifeanyi Ubah talks about sensitising Nigerians about the evil works of these forces of darkness, he is saying the right thing but that alone would not crash the dollar against the Naira as these wicked forces are ready to hold on until Buhari blinks first. It is like a cache-22 situation we are in now, and the only reason the dollar depreciated when Ubah came out with his statement was because the lower and fringe players in the illegal forex industry panicked and quickly brought out their hoarded dollars. The bigger players have held on to theirs and are ready to play this game of Russian Roulette for as long as they are able to destabilise Buhari’s government and turn Nigerians against him.
The solution is very simple and staring us in our face. We do not need any new economic conference purportedly slated for March 10-11th as it would be another waste of scarce fund. It is time to go back to Professor Charles Soludo’s 2007 Strategic Needs for the Naira policy, that sought to revalue the Naira within a year and bring it back to it’s true value pre-1986 when IBB’s Structural Adjustment Programme destroyed the Naira. It is time to restructure our entire currency by moving two decimal points to the left or dropping two zeroes and also issue more coin denominations, it would make at current exchange rate the Naira become N1.97kobo to US$1 and then we can have the true value for the Naira. This can be done within a year to allow for cost of printing new notes and coins.
The moment the government announces this policy, those forces of evil hoarding dollars and making the naira crash would start selling off their dollar. Be rest assured that within a year of announcing the plan to move the decimal points to the left or dropping two zeroes, dollar would become so cheap they would beg Nigerians who need it with it. Those looters of our common patrimony who are wise would quickly bring back their loot and exchange it into Naira while looking for industries, businesses and factories to establish or invest in before the one year grace expires. The essence of the policy, would be to make the Naira at par with the dollar and stop Nigerians preferring foreign currencies like the dollar as their store value while restoring the dignity of the Naira. Put it blankly there would be no use stealing billions of dollars and putting it in a foreign bank account when you know it is the same value. $1billion stolen loot would be equal to N1 billion so why keep your money abroad or hoard any dollar in your possession?
Only a president like Buhari has the boldness of a lion to make such a policy decision and stick to it, as the late President Musa Yar’adua was pressurized to change his mind and even remove Soludo as CBN governor for such a patriotic economic policy that would wipe out round-tripping business and make corruption unattractive all in one year. To fight corruption successfully and lay the foundation for a new Nigeria we need to move the Naira two places to the left, it is either that or they frustrate Buhari out of office. Not even an increase in oil prices can save the Naira as long as these forces of darkness together with their foreign collaborators keep hoarding the dollar and crashing the Naira deliberately. When economists like Dr. Henry Boyo write proposals about liberalising the foreign exchange market, you want to listen to them but first thing we need to do is to revalue the Naira. As import-dependent as Nigeria is, we still export enough of our mono-product (91% of our export is oil and gas) to leave a marginal surplus balance of trade so we have no business with a Naira that is is this battered and devalued. The Ghanaians have revalued the Cedi since 2008 and it only depreciated from 0.9 Cedis to a dollar to 3.9 Cedis to US$1 in eight years due to the real impact of market forces, why should Nigeria be any different and our Naira treated like a serviette paper?
VP Osibajo And His New Tribe Jab
I read the Vice-President explaining that it is difficult for President Buhari to fill up positions in government due to the difficulty in finding descent Nigerians or what he called New Tribes of Nigerians, and the first question that came to my mind was from what tribe did Buhari find VP Osibajo from? The old or new tribe of Nigerians, which? Last I checked our VP is worth up to N1 billion in cash and assets and I’m not sure there are members of the so called New tribe of Nigerians worth that amount.
The problem we have is that as a country we are used to the old hegemonic style of recycling the same faces in government provided they are connected to one godfather, top politicians, traditional ruler etc. or have attended Harvard and Oxford. Thus using the style and system of creating an hegemony makes it difficult to find those New tribe of Nigerians as the VP referred to them and we keep looking withing the same box only to find recycled hands. It is even more pertinent if we have a president who wants to make a break from the hegemonic traditions and you have people around him who would rather want the old style of appointing Nigerians into public service.
We have seen states in the country where singular godfathers determine who get to serve the people and they call such people they appoint all sorts of names from technocrats to bank-rollers to foreign trained experts etc when in actual fact what they are creating is an hegemony, whereby one social group or class of people are in dominance and leadership position over the rest. The new excuse is that there are no new tribe of Nigerians to appoint from but we are waiting and watching to see what tribe (whether old or new) the government would make it’s appointments from. There are over 500 MDAs and government bodies to fill and you wonder what new tribe of Nigerians are going to populate them. We’ve seen well qualified Nigerians like Dr. Henry Boyo, Professor Okey Ndibe, Sonala Olumhense, Dr. Pius Adesanmi, Yele Sowore etc. give their opinions of how to achieve a new Nigeria and yet no one listens to them or give them an opportunity to serve.
I don’t know any of them personally and I don’t think they’ve solicited for any government appointment, but well advanced societies are quick to put to use the abilities of such individual should they indicate interest in public service, but not so in Nigeria. One can understand a certain Reuben Abati became a turncoat and disappointment when appointed to serve, but that was because he worked with a government that was part of the old looting tribe of Nigerians. But working in a serious minded regime like that of Buhari should bring out the best in anyone genuinely interested in service.
Talking about the New tribe of Nigerians, a certain Rear Admiral Henry Babalola of the Nigerian Navy together with his naval colleagues under his command just performed a feat worthy of commendation and even a presidential medal. The Naval Admiral and his team recently made what has been described as the first opposed boarding action ( non-cooperative usually violent boarding of a ship without the consent of the ship’s master and the flag) in the history of Nigeria and West African Navy.
A Dubai Registered ship MT Maximus but leased by South Korean crew members loaded with 4,700 tons of Diesel was hijacked by pirates on the Gulf of Guinea on Ivorian waters on February 11th. It was in the middle of a training exercise between the United States Navy and that of the Ghanaian Navy. The French embassy contacted the USNS Spearhead involved in the training exercise for help, and the hijacked ship was tracked from Ivory Coast to Ghana on to Togo and eventually Nigerian waters. It finally made its way to the tiny Island nation of Sao Tome and Principe (where the pirates knew they had the law of the sea on their side and could not be attacked by the non-existent Navy of the small Island nation). Sao Tome and Principe contacted the Nigerian navy for help (as unknown to the pirates, Nigerian Navy has an agreement with that country to cross freely into their waters), and after eight days of negotiation, Rear Admiral Babalola on February 20th commanded the first opposed boarding in the known history of the Nigerian and indeed West African navy according to records kept by US and Danish maritime security agencies.
At the end, one pirate was killed, six arrested and 18 crew members released with two still being held by escaped pirates. Now you probably won’t find this reported in main stream Nigerian media as the are want to promote hegemonic interests and not national interest, but such a feat would not go unnoticed in saner climes and it shows there are lots of new tribe Nigerians who can make the country great. The importance of what the Admiral and his team did is quite significant, as considering it was the first time ever such operation was carried out by the Navy, their operational tactics should be well documented, improved on and used in future operations and training. The Navy could also now set up a special forces or commando unit with many of the members of the team and use it in stopping oil bunkering, piracy and insurgency in the Gulf of Guinea and Niger Delta region.
If piracy on the Gulf of Guinea is reduced or eliminated, it can boost economic activities there and help reduce Nigeria’s annual fish import by 80% and save us scarce foreign exchange. Considering the VP is a pastor he would be well attuned with the story of a certain firebrand prophet in the Bible named Elijah as told in 1st Kings 19 vs 12-18. When he was threatened by the wicked Jezebel, he ran away into hiding and told God that he was resigning his appointment as prophet and was tired of the people he led because he could not find any from the ‘New Tribe’ he could select from. God did something classic in that story, he rebuked Elijah and on the spot made three crucial appointments that ended corrupt Jezebel’s reign and then told Elijah he has a reservoir of 7,000 more people he could choose from if he still wished.
It’s clear with God there is no hegemony, man his creation should not be different. There are many Nigerians from the ‘New Tribe’ as the VP called it that can be chosen to serve the nation, the problem is we keep looking in the same hegemonic sack for years. We can get the new tribe of Nigerians if we change our mentality and approach in the way we look for them and ready to give every Nigerian as qualified as the position allows the chance to serve their nation. The ‘New Tribe’ of Nigerians are already born and ready to serve!!