Thumbs Up To Buhari’s Sturdy Stance Against Devaluation
President Muhammadu Buhari may have been a let down to many of his former admirers who expected overnight miracles in his change driven campaign that upset the apple cart by making him the first presidential aspirant in the annals of Nigeria’s electoral history to dislodge a sitting President. His critics contend that he has governed or to put it harshly ruled via body language which doesn’t communicate much and makes it near impossible for policy makers to make informed decisions.
His decision to stick to his gun against stiff opposition not to have the naira devalued has earned my respect his shortcomings notwithstanding. On three occasions he has said unequivocally that he doesn’t believe that the devaluation of the naira would solve the nation’s thorny economic quagmire. His latest conviction in his anti-devaluation stance was boldly made known in Kenya.
The London based Economist Magazine which is fast assuming the toga of an imperialist mouth piece opined in an editorial and report that the currency of the most populous nation in Africa should be devalued.
It is a well-known fact that devaluation makes the exports of the affected nation become cheaper. The critical question to ask is what exactly are we producing? Our textile, automobile, solid mineral and other industries lie comatose. Our mono economy largely powered by crude oil export is now under threat as not only has the price of crude oil plummeted in the international market, the decision of the United States to go into crude oil sales and stop buying our oil will lead to the shrinking of our national coffers. What benefit would the devaluation be to an import dependent economy? Japan greatly devalued their yen because their economy is powered by automobile exports.
The devaluation has made the Toyota, Nissan, Honda cars cheaper to purchase in the United States for instance than the Ford or Chevrolet – cars made in Uncle Sam. Consumers are largely attracted to goods of high quality with cheaper prices and therefore the massive sales of their automobiles abroad would lead to the concomitant effect of massive job creation and unprecedented prosperity back home.
This explains why the country was able to leap frog from the ashes after the bombing of Hiroshima and Nagasaki in 1945 to a first world nation by 1964 when they hosted the Olympics in Tokyo in less than two decades. The smart Chinese undervalued the yuan because they export in great numbers. Their exportation of all manner of products has made them spring up from a third world nation to the world’s current fastest growing economy – an economy that lifted six hundred million people from deadening poverty. What are we producing to warrant a purported devaluation?
It would lead to a drastic reduction of the purchasing power with the middle and lower class that would be the worst hit which would trigger off a plethora of crisis. We will have to pay more for imports which would lead to a free fall of the naira and would make the current 305 naira to a dollar a mere child’s play. The falling purchasing power would only worsen the unemployment crisis as few Nigerians would be able to buy the goods and services produced and many companies would be forced to close shop as the cost of production would also rise.
One curious thing is that the west doesn’t go for the devaluation option when faced with economic challenges. When United States President, Barack Obama assumed office in 2009, he faced two major challenges – the decimation of the economy caused by his predecessor, George Herbert Bush Jr who fought two senseless wars in Afghanistan and Iraq and also the economic meltdown caused mainly by the subprime mortgage crisis. He did the unthinkable by bailing out the auto industry instead of leaving them to market forces as the norm in the bastion of capitalism. Why wasn’t the dollar devalued? Why didn’t the Economist call for a devaluation of the British pounds when the United Kingdom had their share of challenges? Why are third world nations always used as guinea pigs to implement anti-people policies?
Nigerians not caught up by amnesia brought about by the challenges of chaotic daily living remember the devaluation mess brought about by former President Ibrahim Babangida in the 1980’s. The wily General allowed the populace resist the devaluation agenda of the World Bank and International Monetary Fund but then propped up a homegrown clone of what the Washington based institutions were trying to sell with American trained Chu Okongwu and KaluIdikaKalu positioned strategically at the helm of the financial affairs.
Third World Leaders have to realize the painful reality that the west doesn’t want Africa to develop or even grow at all. Walter Rodney’s masterpiece “How Europe underdeveloped Africa” an evergreen masterpiece says it all and it should serve as an eternal warning to those who have to contend with the present reality of neo-colonialism.
Chinua Achebe’s Classic, ‘Anthills of the Savannah’ a Booker Shortlist written in 1987 is a sad reminder of our present state of stagnation decades after receiving political independence from our colonial masters. Sam, the Head of State invited Beatrice Okoh, the fiancée of a close friend of his and former secondary school mate, Chris Oriko who also served in his cabinet as the Commissioner for Information to a state banquet which had an American journalist in attendance.
The patronizing lady proceeded to lecture Sam and his entire cabinet on the economic direction in a very condescending way. Beatrice was so disgusted that she gave Sam a piece of her mind by asking him whether local journalists could go abroad and take foreign heads of state hostage. History repeats itself because man learns the stories but never the salient lessons. Is it possible for a media outfit in Nigeria to purport to influence public policy in the west? What is sauce for the goose should equally be sauce for the gander.
We hope Buhari resists the devaluation pressure and charts a viable economic agenda that can get the nation out of the woods without any undue western influence. We should not repeat the mistakes of the past as the sad reality is that the west doesn’t really mean well for us. We really commend his bravery for standing up to the bullying tactics of the overbearing and arrogant Caucasians who would stop at nothing to re-introduce the slave trade in another form through the back door.