Devaluation: Naira Is Only As Strong As Demand For Nigerian Made Products
With the integration of international credit card services like MasterCard, Visa card, American Express card etc into Nigerian financial/banking system a few years ago, Nigerian consumers became a major part of the burgeoning army of consumers of goods and services across the universe who can shop from the comfort of their homes.
Such magnitude of global trade is enhanced by the introduction of World Wide Web, www – Internet facilitated market platforms like Amazon, eBay , Alibaba etc which is bolstering international trade in the manner that the world trade organization, WTO and other purveyors of globalization envisaged- a world of interconnected markets.
With such robust infrastructure and facilities in place, it has become possible for Nigerians to order luxury items like a pair of Christian lubutin shoes, miu miu dress, coco channel clutch bag and Jimmy Chu or Luis Vuitton travel suite cases (in New York ,Paris , Milan or London shops), and pay for them with their naira debit/credit cards and have the items delivered a couple days later to their door steps in lagos,Kano, Portharcourt or Abuja.
To fully involve or rather entrap Africa and indeed Nigeria in the global trade arrangement,Amazon, eBay and Alibaba ‘cousins’ like konga and Jumia, have also birthed in Nigeria through the assistance of venture capitalists such as Rocket- a German based ‘Angel’ investor.
Nigerians taste for everything foreign is so much that instead of holidaying in Nigeria at Obudu cattle ranch, Ikogosi warm spring or Yankari game reserve, Nigerians flock to Disney in California and Florida.Those not inclined to head to the USA, make a bee-line to Disney in Paris, France and to see the Eiffel towers and to London, U.K.to visit madam Tussauds,view the Big Ben and see the London eye etc.
For the not so rich folks, Dubai, UAE with liberal visa procedure and lately, Istanbul,Turkey are the destinations for tourism and trade .
The influx of Nigerians into the desert country and Arab gateway to Europe , Dubai and Turkey respectively was so much that the authorities had to introduce stricter visa terms stopping travelers below certain age from visiting Dubai without being accompanied by elders.
Such frenzy of global consumerism being driven by the template of the so called Breton wood institutions- the World Bank, the International Monetary Fund,IMF, and lately World Economic Forum,WEF may be creating the atmosphere of convenience for consumers in the industrialized world whose purchasing power arising from their countries strong gross domestic products, GDP, can afford the lifestyle, but not so for Nigerians who produce nothing, except oil whose price has now plummeted.
Why are ordinary Nigerians so unconscionable and irredeemably desirous of and besotted to consuming everything made abroad, one may wonder ?
Why are affluent Nigerians quick to boast that their kitchen cabinets and marble floors are made in Italy, yet Nigeria is surrounded in the south-west and south-east by rain/mangrove forests with abundant wood stock and our landscape is crested by mountains and rocks with limestone for making marble in the south-west and middle belt.
The folly of Nigeria producing only one item-crude oil that could generate foreign exchange,fx and consuming so much that are not produced locally,therefore require fx to purchase,has now started impacting negatively on the fx reserve as the price of oil which is Nigeria’s main export has dipped by as much as 70% , resulting in the subsequent loss of substantial earnings from the commodity.
Arising from the present global financial crisis, it stands to reason that the penchant for Nigerians to continue to have unbridled taste for consumption of foreign made goods and services would be reduced, but is that the case?
Rather than the taste of our people aligning with the prevailing economic circumstances and thus change to frugality,which are the trade mark of our political leaders- president Buhari and Vice President, Yemi Osinbajo, the central bank of Nigeria, CBN has been recording upswing in imports.
This has resulted in the depletion of our erstwhile robust fx reserve to all time low of a paltry twenty ($27b from about $50b under former president Olusegun Obasanjo, OBJ.
What most Nigerians do not seem to understand is that assuming the naira is devalued by a fiat as some of us are demanding and the fx vault is opened for unrestricted access, the current meager fx reserve ($27b) could hardly support six (6)months of imports, if Nigerians continue with same consumption pattern.
Worse of all, if our fx reserve is exhausted , the terms and conditions of trade with our international trading partners will dramatically be on the negative side. By that l mean Nigeria will be high risk trade/investment destination and interest rate etc will skyrocket.
This is one of the justifications for the CBN baring of fx allocation for import of forty one (41) items.
From the foregoing, before any devaluation could take place, we must first of all re-orientate ourselves from excessive compulsive consumption of foreign goods and services to accepting locally produced ones. In that regard, we have to first of all borrow a leaf or two from the Chinese book of developing local capacity, before opening up their market to international competition about fifteen years ago.
The truth is that, the more the dwindling fx earning is unable to match the famous epicurean taste of Nigerians for Western products(exotic items now barred), the more the naira is devalued,hence the outrageous parallel/ black market exchange rate is now hovering around the $1-N400 mark.
In other words, the less the dollar inflow, the more the naira chasing the few dollars and the weaker the naira.
With oil price still low, dollar inflow will not be forthcoming soon.
Added to the gloom and doom of paucity of fx inflows from oil sale, is the fact that president Buhari appears to be the only one in govt commenting on wether or not the naira would be devalued.His comments have been making investors nervous because it tends to create the impression that Nigerian economy is being run like a one-man-show, instead of being operated by an economic management team, which is not in conformity with global best practice. It does not help that mr president has a previous antecedent of being a military dictator when he first served as head of state (1984-5) and decrees enacting anti trade measures like trade by barter etc resulted in the lock down of Nigerian economy from external participation. Any thing that makes international investors believe that they may not be able to repatriate their investments, makes them edgy. In the eyes of a potential foreign investor,running an economy like a sole administrator is akin to dictatorship or autocracy which is an anathema to free market ,capitalist system that Nigeria is supposed to be operating.
In a situation of uncertainty,investors play the wait-and-see game and in the process of a protracted wait,which has now become the case, the naira remains under pressure until clearer political and economic policies are discerned by investors.
Similar concerns and anxiety are currently being exhibited by investors in the United Kingdom, U.K.
This is owing to the fact that uncertainty surrounding Britain’s possible exit from the Eurozone through an upcoming referendum tagged Brexit is making potential investors in the uk economy skittish.
That is my humble assessment of the prevailing situation fueling the volatility of the naira .
Furthermore, l have this quaint felling that the integration of Nigeria into the global credit card payment system via MasterCard, Visa Card,American Express, Thomas Cook etc was a bit premature as Nigeria is really not ready to compete in the same market place with consumers from industrialized Western countries like USA, Japan,U.K, Germany and France amongst others.
Without Know Your Customer,KYC control measures like the CBN mandated Bank Verification Number, BVN for every account holder in banks, how could the abuse of the system be prevented? For example, it was never envisaged that an individual would have 200 ATM cards with which he goes to Ghana to withdraw $500 a day for one week and returns to Nigeria to exchange it at black market rate on the street. Such nefarious practices have been the order of the day with the consequential result of a rapid erosion of the CBN fx reserve.
The absurdity of the potential fraud situation even got more bizarre when it was recently reported that a supposedly ‘mad’ man was caught with 22 ATM cards even in the era of BVN. How ingenious !
In Nigeria, the ethnic rivalry fostering the north,west, east and south divide plus the Muslim and Christian Faith fault lines which are creating unnecessary acrimony and tensions are responsible for the lack of patriotism and nationalism that could have engendered the sort of zeal that drove the Singaporeans to transform from third world to first world in a few decades and gave the Chinese the impetus to galvanize the muscles that facilitated their rise from abject poverty to being the second largest economy in the world in less than two decades of opening up for international business.
We shall come back to that later, but first let’s compare and contrast the attitude of the average Briton, American and Nigerian to the use of credit cards
Typically , an average Briton or European is noted for being more frugal and cautious than an average American with respect to accepting credit cards and incurring credits from aggressive vendors of luxury goods and services.
Unlike the Briton , the average Nigerian is like the American who can own up to five (5) credit cards and he or she is also easily susceptible to making frivolous purchases, a habit responsible for the insatiable quest for the dollar, outflow from Nigeria and responsible for the pressure on the naira.
Cooperation between international credit card companies earlier mentioned ( MasterCard,Visa Card, American Express, Thomas cook etc) with local Nigerian banks that has made ordering of luxury items via debit cards,exacerbated the situation as most Nigerians lack the discipline to resist vendors who inundate them with high-end items that they don’t need.
In contrast to the Nigerian whose country only has a mono product to trade for fx-oil ,an American in Los Angeles or New York, for instance, can afford to purchase anything in the world with a credit card without similar financial consequences or constraints faced by a Nigerian and Nigeria in the scenario described in the foregoing passage because chances are that most of the luxury items to be purchased are made in or by USA.
With multiple products and services to generate foreign exchange income,America is basically a credit society which Nigeria is not.
Owing to the US’s high level of industrialization,a basket of products being sold world wide like the ubiquitous Apple products-laptop computers, iPhones, iPads etc and Boeing corporation range of passenger aircrafts as well as cars and trucks from General Motors, GM, Ford Motors,Rolls Royce, Cartapillar earth moving range of products, not forgetting HollyWood block buster movies and Nike shoes/ Levi’s Jeans, just to mention a few, are made in the USA. These range of consumer and industrial products,which are literally flying off the shelves of shops all over the world, are the trigger for the demand for the US dollar and therefore the reason that, USA’s dollar is very strong and the country’s GDP is in excess of seventeen billion dollars- the highest in the world.
Needless stating the obvious that arising from her robust range of products and services traded world wide,the USA has global balance of trade in her favor and therefore a justification for her pole position as the foremost economy in the world.
When you compare USA’s GDP which is in excess of $17 billion and the highly exchangeable dollar to Russian $2b GDP economy and her currency,the Ruble which is only in demand in that country,then the reality about the comparative economic strength of Russia viz-a-viz the USA will become more manifest . This is in spite of the fact that Russia has the largest deposit of oil in the world but her economy is a mere $2 billion in GDP value and the Ruble is only accepted in Russia. From the Russian experience, it is now more easily discernible why a country’s currency is only as strong as the global demand for her goods and services.
In fact, the popularity of the dollar is so much that it is alleged that there are more $100 bills in Russia than there is in the US and the reason as stated earlier is that demand for a country’s currency is proportional to the number of goods and services she produces and sells to the rest of the world.
Unlike the US with a basket of products sold world wide,Russia which used to be a supper power and the US’s biggest threat and rival as the global hegemony in the days of the Cold War,has little or no products selling world wide, apart from crude oil
If in doubt visit any super/hyper market in lagos, Abuja or Portharcourt, pick up the items on the shelve and find out which ones are made in the US and in Russia you may be amazed at your findings.
Chances are that you will find more goods that are made in the US and China, which is why those two countries- US and China are the biggest and second biggest economies in the world.
This explains why, in the wake of the drastic drop of the price of oil in the international market, and the ensuing challenges in the global economy, Russia was pressurized to devalue her currency, but instead of gaining a reprieve as she had expected, her economy further nose dived to the extent that Russians are currently engaging in street protests over the parlous state of their economy.
If Russia had a wide range of products that she is selling to the world, like the US, Germany or China, the devaluation of her currency would have facilitated demand for more of her goods and services which would become cheaper to importers and boost her foreign exchange earnings, but that has not been the case since that country is only a net exporter of crude oil whose price is based on international pricing standards.
Coincidentally,Nigerian situation is to a large extent similar to that of Russia in terms of being dependent on a mono product- oil plus mineral/precious metals.
The only exception is that Russia is under global sanction so there is no Foreign Direct Investment, FDI inflow, instead there is massive outflow.
Applying the rule of the thump assessment , my fear is that if Nigeria devalues the naira, it could go the same way as Russia- deepen the economic quagmire.
Nigeria could have been able to devalue the naira if she had harnessed her potentials in farming where she has comparative advantage in international trade by growing and exporting yams from zaki biam in Benue state(Ghana is now the largest exporter of yams in Africa) and ditto for flowers from jos in plateau state(Kenya earns millions of dollars from exporting the item to the USA and Europe) to mention just two simple items.
Mark you, l’m not totally averse to devaluation, but there is need for a change in a gamut of fundamentals such as our lax regulatory system that enables crooks to game the system and our compulsive excessive consumption pattern that requires restructuring before any devaluation can take place or for the naira-dollar pricing to correct itself.
The reverse of the situation in Russia is the case in China ($10 trillion GDP) which like the USA and the rest of the industrialized world, produces a broad range of products and services sold internationally, hence the devaluation of her currency, Yuan would trigger trade wars between the G7 countries- USA($17b GDP ), Germany ($3.8b GDP) , France($2.8b GDP) , Britain($2.9b GDP , Japan($4.6b), and Russia ($2b GDP) who accuse each other of breach of agreed trade protocols(tariffs etc) with a view to tilting the balance of trade in favor of their respective economies.One of the commonest sources of attrition for the industrialized countries is steel which they accuse each other dumping in their respective markets.
When such conflicts arise,it is the WTO that weighs in with arbitration aimed at de-escalating the tensions.
Please note that WTO,(headquartered in Brussels) to the trade industry is like the Interpol,(with head office in France) which is the linch pin in the world of police force globally, just as the United Nations,UN ( based in New York) superintends over the one hundred and ninety three (193) member countries in the comity of nations.
Is it not curious that the aforementioned global agencies that control the global economy are located in only Europe and the USA without any in China, Japan and Russia which are also major members of the the G7 countries? Why can’t a Brentwood institution of significant importance be located in Nigeria (largest in population and economy) to cover Africa’s quota since 54 nations of the 193 members of the UN are from Africa ?
The reason is very simple: Japan, Russia and China are late joiners of the supranational institutions floated by the industrialized Western countries for the political and economic control and manipulation of the world and African countries are mere passengers on the UN train.
The foreign media outfits like Time magazine and the Economist that have flayed Nigeria for baring allocation of fx for the importation of 41 items are part of the Western conspiracy and cohort aimed at fostering the superpowers hegemony structured to imperil Nigeria and Africa to ensure continuos subjugation by the Western powers. So the western media assessment are at best insincere and at worse mischievous as they are vilifying Nigeria for going against their westernized financial concepts which hardly take into consideration the local dynamics of Nigeria’s Perculiar circumstance of being a mono product exporter that does not need to devalue to sell more and earn more fx.
Thus , applying same economic template for highly industrialized USA, Germany, Japan or China to Nigeria as the Western media seem to be orchestrating, defies sound logic in my view.
Undoubtedly,devaluation can not be the only way out of Nigeria’s financial crisis.There are some documented evidence now establishing the fact that capital control are efficacious means of arresting or reversing negative economic fortunes of nations.It was applied in Western Europe in the days of yore: Border Control Act 1300 AD enacted by King Richard ll of England, prohibited the export of metals which was the means of exchange in those days.King Henry the Vlll lifted the restriction in 1538. Capital control measure was also deployed in the USA during the Great Depression 1914-44 when the great economist of all time, John Maynard Keynes made a case for restrictions of capital flows to halt capital flight. In modern times, Iceland,Cyprus and Greece applied some form of capital control mechanisms during the euro crisis of 2008. In 1997, during the Asia financial melt down,Malaysia resisted Western pressure to devalue and instead applied capital control measures and currently and her economy performed better than the Asian economies that devalued.
India like Nigeria has some form of capital control in place.
Down the road from Nigeria, Ghana buckled under pressure from Western equity and portfolio managers to devalue and the economy is now in shambles.
The IMF is now engaged with Ghana trying to salvage her economy.
It might interest readers to know that prior to fifteen (15) years ago when China joined the WTO, in December 2001,Chinese economy was shut off from global trade and the rest of the world because it lacked the infrastructure and means to compete with the Western countries which were by far more advanced in industrialization. The Chinese who pride themselves with bringing the Confucius civilization (which is one of the earliest) , to the world, somehow bucked the trend behind Europe which quickly embraced the industrial revolution which started in England in the late 17th century when iron smelting, production of textiles on industrial scale and the steam engine were introduced after an innovation adventurist, sir Richard Arkwright developed the spinning machine in England.
Being disadvantaged, and against all odds, China embarked on solving her energy shortage challenge by constructing the three gorges dam which displaced over three hundred thousand families, and drew the ire of global environmental watch dogs like green peace and the UN but led to the generation of enough electricity to power Chinese industries which has now made her the de facto ‘factory’ to the world.
Today, it is a truism that the rest of the advanced society go to China for the manufacture of their products including the likes of Apple computers and phones, Microsoft and Hewlett Packard computers, are some of the hordes of American products assembled in China at less cost than anywhere else in the West due to the lower price of labor .
Now, in more ways than one, in Africa, Nigeria is like China especially in terms of population size, so why can’t Nigeria position her self to be the hub of industrial production for the continent ?
Earlier,l had briefly chronicled how China shut herself off from global trade to more or less incubate and improve her capacity to compete globally before joining the WTO .
The greatest enabler for that accomplishment is her dramatic capacity to generate the highly needed electricity for industrialization through the construction of the three gorges dam.
Nigeria can emulate China in that development paradigm by investing most of her resources to boost electricity power supply that would launch her into industrialized nations league and like China become the hub and ‘factory’ for the production of goods and services, at least in Africa which is a continent of roughly one(1) billion consumers in about fifty four (54) countries.
The Barack Obama, USA president Light Up Africa initiative, l believe is premised on the concept of Africa having abundant electricity to trigger industrial revolution, so why can’t Nigeria as the most populous African country and the largest economy on the continent, latch on to the USA initiative aimed at pulling Africa out from the brinks and in the process change her from being referred to as the dark continent, to being the new growth frontier, which it should be?
Whilst pursuing the USA driven initiative ,Nigeria can at the same time go into strategic alliance of sisterhood, fatherhood or mentorship with the Chinese with a view to learning from the ‘master’ the secret of their success.
Why should we continue to refer to England as our colonial masters when we did not really gain much from them, and we can team up with the Chinese who are the masters of mentorship concept,as we might have all seen from their movies(Bruce Lee and Jackie Chan) whereby young marshal arts practitioners go into tutelage under sages or masters in the art, who train them into becoming equally artful kung fu masters.
It’s about time we stopped pandering to Western powers who keep discouraging us from going eastwards to China.l’m convinced that the Western world is alarmed that we started gravitating eastwards without their tele-guiding us. Thats why they try to brain wash us into believing that Chinese products are inferior, because they are cheaper than the European and American one’s . In any case , inexpensive products are what the average Nigerians can afford now because of Nigeria’s GDP which is a mere $513m compared to USA ‘s $17.4b and China’s $10b.
It did not surprise me when the USA , U.K, France and Germany, recently rolled out red carpets to welcome Chinese president Xi Jinping, on state visits to those western countries that used to deride China.Remember the wisecrack “if you can’t beat them, join them”?The Western powers too are now forging alliances with China.
Most of us can recall economics 101-elasticity of demand which states that the poor would purchase cheap items which may not last long but which their income could afford at that point in time.
Obviously,Nigeria’s GDP and the purchasing power of an average Nigerian can’t afford high end products of Europe and USA right now.
The natural course of progression is that the higher we grow in the wealth ladder, the more our taste would improve, but catapulting from a relatively poor country to a people with appetite for goods and services, (we can’t produce) and comparable to Americans taste-the richest country in the world, is what l can not phantom about Nigeria and Nigerians.
Although the fundamentals are better here in Nigeria, the Chinese and Americans have entered mentorship arrangements with the most industrialized nation in Africa,South Africa,SA ($350b GDP),where the Chinese are major players in their financial services sector (Chinese bought major stake in Standard bank of SA).Perhaps this also underscores South Africa meriting a place in the group of fastest growing economies,Brazil, Russia,India , China and later South-Africa, BRICS enunciated by the former investment banking group, Goldman Sachs,’s MD, Tim O’Neil.
Following the lead of China, the biggest USA retail firm, Walmart has also bought into into SA’s retail firm-MassMart/Game just as Marriott has also acquired a big chunk of SA’s hotel chain-Protea.
Keep in mind that SA at a point was isolated by the world as punishment for her practice of apartheid. As they say, necessity is the mother of invention, hence she was compelled to rely on local sources and skills for growth and such challenges probably enabled her develop the capacity for innovations and inventions in order to be independent of the rest of the world from which she had been shut out via economic sanctions.
Which local Nigerian brands can be bought by the Chinese or Americans a they did in SA? Unfortunately,none because we did not develop local capacity, instead we relied on foreign sources, largely through a policy which promoted importation.
In fact, I would argue that it is partly the wrong policy of import substitution which Nigeria has practiced over the years,as opposed to backward integration that could have encouraged development of local expertise and strength,that is responsible for our dependency on Western products.
In my considered opinion, if Nigeria concentrates on development of a strong industrial base through a quick build up of her electricity power generation and distribution infrastructure, her position as part of MINT -Malaysia, Indonesia, Nigeria and Turkey (the new coinage by Goldman Sachs) as the next global economies to watch, can be a realty in no distant future.
Dishearteningly, from the look of things, that lofty idea of aggressively addressing our power infrastructure deficit does not appear to be a significant part of our hard fighting president Muhamadu Buhari’s agenda. Apart from aiming to wipe out corruption and vowing to recoup most of all the funds that was ostensibly looted, he has consistently stated that the priority of the present regime is to develop agriculture and mining in order to dig Nigeria out of the financial hole in which it is now mirred.Harnessing our agriculture and mineral resources is a very good strategy, but we can’t go very far if the means of scaling it up to enjoy the entire value chain, which is electricity needed for processing the raw materials into finished products is lacking.
The fact that the very critically important power/energy sector has been lumped up with Housing and Works ministry under the purview of the hard working and energetic governor of lagos state, Babatunde Fashola,speaks volumes of the insignificance of power sector development in president Buhari’s agenda.
Instead of saddling Fashola with three huge ministeries,how about giving the super minister the sole mandate of delivering electricity by all means and leaving no stone unturned ? With such mandate, Fashola would have no choice but to pay full attention and deliver on the mandate wily-nilly.
Based on my modest understanding of global development, l don’t see how an agrarian based economy (which president Buhari envisages) can transit from third world to first world as was the case of Lee Kwan Yew’s Singapore, which was transformed from third to first world (1965-2000) through sheer tenacity of purpose to acquire knowledge for innovation.
The substance of Singapore’s phenomenal success, which is what is between their heads and not what’s beneath their earth crust, has been captured in many books so there is no need belaboring it but permit me to highlight some points to contrast how both China and Singapore toed different development lines but arrived at same or similar destinations of success .
China did it by incubating skills and capacities in mainland China before breaking out by imbibing the Western influenced business culture sipping in through the then British governed Hong Kong and the US managed Taiwan.
Singapore which toed a different path, also accomplished her outstanding development by formulating policies that would promote seeking of knowledge through scholarship provided for their young and bright men/women who were sponsored to the best institutions in Europe and USA to acquire the requisite skills and leadership acumen needed to leap frog developments back home .
According to some accounts, this was done by Lee Kuan Yew after “getting the basics right” following identification of the key problems in nation building, analyzing what’s needed to be done and with uncompromising determination he went about doing it.
The stunning outcomes of both the Chinese and Singapore strategies are there for our leaders to study, applaud and emulate.
President Buhari must start the change that he promised by leading Nigerians into changing their taste for foreign made goods to Nigerian made products. Instead of buying over three billion, five hundred million naira (N3.5,000,000,000) worth of BMW cars in the proposed 2016 budget, Aso Rock and the National Assembly, NASS should procure vehicles from Innoson motors , the only producer of Nigerian designed cars as Ben Bruce and other online Matadors have posited . If that company does not have capacity to cope, Nigerian assembled cars by the recently established automotive assembly plants should be patronized so that there will be more employment for our youths.The alleged scam associated with the introduction of the automotive policy should be addressed by president Buhari who has zero tolerance for corruption. Once govt buys Innoson cars and other locally assembled brands, you will be amazed at the speed with which BMW will set up a plant in Nigeria.By the way, BMW has a plant in South Africa from where it supplies Nigerian market which is much bigger, yet the company did not deem it fit to set up a manufacturing plant here. Reason may be due to lack of infrastructure, especially electricity power. So you can see why l’m advocating stability of electricity supply as president Buhari’s development priority.
The over one billion naira (N1000,000,000) voted for food and entertainment in Aso Rock in the appropriation bill 2016 should be invested in Nigerian food vendors so that our farmers can be encouraged to produce more.
Already Erisco Bompet, producers of tomatoes paste from raw tomatoes grown in m Nigeria has proven that it can be done. No more wheat bread in Aso Rock.Former president Goodluck Jonathan demonstrated to Nigerians via tv how cassava bread can be delicious when Nigerian master bakers paid him a visit in the villa.Rice milled from Abakiliki in the east and from Makurdi in the middle belt, should grace the dinning tables in the seat of power, Aso Rock. The quality may be lower than uncle Ben’s rice for now, but practice makes perfect. We can produce vegetable oil from the groundnut that used to form pyramids in kaduna and Kano, so no more imported Whessom oil from the USA for cooking in the villa, since made in Nigeria Kings oil is also very good. First Lady (mrs Aisha Buhari) should see to that.
If mr president can lead the charge from Aso Rock, all other governments at both state and local council levels, would follow suit, then the rest of us-ordinary Nigerians can lead from the streets.
As soon as one hundred and seventy million (170m) consumers in Nigeria increase their demand for Nigerian made goods and reduce their penchant for foreign made ones, the demand for the naira will be higher and the quest for dollars will go down with the resultant effect of strengthening the naira .
Going forward, if Nigerian leadership and follower-ship don’t see the pressure on the naira as enough challenge to make the sacrifice of cutting our coat according to our size/clothe,a mission that must be accomplished by patronizing home made goods and services,then we have ourselves to blame ,not president Buhari or CBN Governor , Godwin Emefiele for our woes.
As the American Unitarian theologian, William E Channing once counseled “Difficulties are meant to rouse, not discourage.The human spirit is to grow strong by conflict”
Nigerians should think critically and adopt the policy of ‘injury to one, injury to all’ so that we can all pull in one direction to steer Nigerian economy away from literarily falling off the cliff.
Without further or much ado, president Buhari should ‘bell the cat’ by rolling out his plans on how Nigerian money should circulate more in Nigeria by patronizing made in Nigeria goods and services. China did it successfully and l don’t see why we can’t.
To be clear, l’m not proposing that Nigeria should be in a state of autarky- which implies little or no trading with other countries as is the case with North Korea,but l’m advocating that we should not open our markets to other countries which are rich enough to subsidize their exports to our detriment.
Do most of us understand that Etisalat, is subsidized by Qatar, the home country? So also is Emirates airline nurtured by the UAE and MTN buffeted by South Africa.
Does Nigeria have a policy that compels public officials and civil servants to patronize GLO indigenous telecom network exclusively for govt activities or for officials to fly only Arik, Aero or Medview airlines (home based airlines) on international trips? Such measures can help stem capital flight which occurs via patronage of foreign owned airlines and telcos which amount to quite a lot annually.
In the wake of the current fx restrictions,foreign airlines are already threatening to stop flying Nigerian routes because they can’t repatriate funds easily.Home based airlines have no such issues and this underscores the need for us to patronize them to help them grow .
The urgency to save the naira and by extension Nigeria is further accentuated and strengthened by the fact that every time an annual budget is passed in Nigeria, about 80% of the value leaves Nigeria for foreign countries.
This happens when we pay contractors to provide infrastructure like roads, bridges and houses because most of the components used for construction work are imported, except part of the labor(some workers are expatriates) and the rest are cost of cement and sand procured in Nigeria which is less than 20% of the contract sum. When we equip our hospitals, the gadgets are foreign made just as we procure educational tools for our schools and vehicles which are imported as well.
Invariably, we earn income from oil sale in dollars, then convert it to naira for monthly allocation to the three tiers of govt and shortly after convert same into dollars again to procure the foreign made items listed earlier simply because we are a consuming instead of exporting country.
Right now, it is being reported that the banking sector is struggling with excess liquidity of about N1.5 trillion which are a combination of recently liquidated CBN treasury bills and of course deposits for fx that are un utilized following scarcity of foreign currencies to match demand. Had it been that there was no shortage of fx,perhaps the N1.5t (less than the fx demand met by CBN) would have been transferred abroad in the past few weeks to fuel foreign economies and provide jobs for citizens of other countries, while our unemployed pine away in penury.
In line with president Buhari’s famous quote, Nigeria must kill corruption, before corruption kills her, a new slogan made famous by Ben Bruce and co on online media platforms ,should be: #TO SAVE THE NAIRA, BUY ONLY MADE IN NIGERIA GOODS AND EXPORT MORE NIGERIAN GOODS & SERVICES .
Let me conclude with the words of wisdom of the Scottish- American industrialist that led the enormous expansion of American steel industry,and one time richest man in the world, Andrew Carnegie, who posited that “People who are unable to motivate themselves must be content with mediocrity, no matter how impressive their talents”
Nigerians, I know we can do it, so let’s just do it,now.
***Magnus Onyibe, a development strategist, futurologist and former commissioner in Delta state govt is an alumni of The Fletcher School of Law and Diplomacy, Massachusetts.