Merely by the strength of the forces arrayed against the naira at the moment, it seems a matter of time before the currency is taken to the Golgotha. It’s the morbid season hence the swooning of the vultures for the proverbial carcass. As it seems, not even the valiant efforts of Godwin Emefiele and his men at the apex bank would suffice to stave off the cataclysm in the face of the reprobate forces massed against the Nigerian economy.
Ask anyone about the factors responsible for the current travails of the naira. You’d be surprised at the range of answers you get. Oil would of course remain the chief culprit. With a barrel of crude at sub $30, the economic Armageddon, surely is set upon us. With barely enough left after paying wages, the exotic tastes of our over-pampered elites would seem for now out of the consumptive equation.
For many however, the problem simply begins and ends with Emefiele and his colleagues at the apex bank. This position appears to have gained some traction in the weeks following the restrictions placed on the forex market. I perfectly understand the angst of traders in the 41-odd items precluded from Emefiele’s naira auction. I guess it would also apply to manufacturers and operators in the real sector who can’t seem to find forex in the official window despite Emefiele’s grand promise to meet all of their legitimate demands. Add to the group, the operators of bureau de change who were only last week ousted from accessing Emefiele’s greenback trove – never mind their protestation that their segment is a mere five percent of the market; all of them have just about something to say about the Emefiele wahala!
Unfortunately, if we aren’t so eager to embrace simplistic solutions even at the risk of fatal misdiagnosis; or put in another way – if we are not so enamoured about placebos to the point of misplacing them for the curative drug, it seems to me the best time – if ever there was – to take a hard look at what fundamentally ails the Nigerian economy and by extension the naira.
I have followed with amusement the argument of those who insist that the currency be left to float as indeed some of the other related jargons about letting the naira find its true value. Well, yours truly is still waiting to be ‘educated’ on the ‘true value’ of a product known to be finite in supply and indeterminate in demand – short of making the argument for the speculators to overrun the market since their price, arguably approximates the so-called real value of the naira!
That is however a different matter. Today, I talk of a more insidious threat to the national economy. I speak of the enemies adorned in the garb of friends. I speak of the tragedy of a nation hung on so-called foreign investment while local initiatives are left to flounder. Today, if we have learnt our lessons from the exit of foreign portfolio investors at the first signs of the global credit crisis in 2008/9, it is how barely we have taken in the hard lessons. Remember that the singular exit cost the Nigerian bourse $5 billion from which the market is yet to recover. Five years on, it took the long-predicted rumble in global oil prices for the shacks to cart away $4 billion overnight; our bourse has been reeling in the aftershock ever since.
Of course we are back to the same ruinous path. Today, only few Nigerians know about the multiple billions of dollars carted away in remittances, charges, patent and royalties and other sundry charges by our do-gooder foreign investors. By the way, that is hardly a crime particularly when values are delivered to the economy. The problem is when the so-called foreign investors increasingly become mere conduits for repatriating billions of our limited foreign cash through their dubious mechanisms of over-invoicing. Guess you know by now who gets to benefit the most when the patron saints of the IMF come calling with their demands for greater liberalisation of the forex market! Never mind that it is the surest path to their usual policy support instruments (PSI), a euphemism for the bitter pills of adjustment that our citizens have come to loathe when things go critical wrong!
The point I seek to make is that economic nationalism has gone beyond the textbook stuff. Whatever may be said of the cement manufacturing sector at the moment, it is adjudged a success story by any standards. With combined capacity of the nation’s cement plants in excess of local requirements, it is little wonder that Emefiele and co can dare to call the bluff of cement importers!
Contrast with the cartel of fuel importers that continues to insist on holding the nation by the jugular. The story of the billions spent on the racket of fuel imports and its multiple industries of rent along the value chain are by now familiar. What is little known is that Oil Cartel Inc. actually consumes 34 percent of the entire demand for foreign exchange.
Still want to know why the naira will not recover in near term?
Now, if that seems a stiff price to pay to get Africa’s largest economy moving, there is at least some good news that our ordeal will soon be over. I speak of the day when the 650,000 barrels per day Dangote Refineries and Petrochemical Complex would finally come on stream – in 2018. Should things go as planned, the country would from that date save a third of its current forex requirements used for fuel imports!
As it appears, there is no end to the milking of the Nigerian cow. Late last year, many newspapers gleefully reported on the threat by foreign airlines to reduce their flights to Nigeria. The reason – as you might guess – is said to be the difficulties being encountered in remitting their sales abroad.
Of course, save for the tinge of blackmail, the issue of what they choose to do or not to do is entirely their prerogative. And while we are at it, one of the more notorious of the airlines has since laid off its half-dozen Nigerian crew. And if it seems sufficiently galling that Nigerian passengers pay about 76 percent more in the premium class of European carriers on their West African route, what about their sworn opposition that have rendered the principle of reciprocity embedded in the various Bilateral Air Services Agreement (BASA) nugatory?
It couldn’t get more bizarre that the biggest economy on the continent is expected to catch cold because a cartel of foreign airlines dared to sneeze over difficulties being experienced in their attempts to cart home $470 million –the value of third quarter 2015 ticket sales.
Still wondering about the beneficiaries of the tutorials on forex liberalisation?
I close. The old saying that soldier go, soldier comes but barrack remain holds true. The nation’s economy to which its fate is inextricably tied, is for us to make or mar. While our home-grown experts junket foreign capitals in search of foreign investment of dubious values, yours truly merely ask that they spare a thought to local entrepreneurial efforts. With a fraction of the support given their foreign counterparts, and with massive investment in infrastructure, I wager that the local business will soar like the eagle.
Trust me.
NATION
END
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