Dangote Fpi & Banks Must Substantiate Lion Share Of Forex
Most of the governments that found itself with dwindling foreign reserves as Nigeria would look at the major users to see if they appropriately accomplish the reasons for their allocations. Dangote, Foreign Portfolio Investors, FirstBank, Zenith Bank Plc and Stanbic IBTC Limited must substantiate their lion share and domination of our foreign reserves. So are the increasing numbers of parents sending fees to their children for courses easily available at home.
Under normal circumstances, one would not question international businessmen like Dangote, Otedola or even owner of beloved Innoson, Innocent Ifediaso Chukwuma; just to name a few. But Nigeria has never been an ideal country where anyone is above suspicion in view of past abuses. Each of these three should be our foreign cash cows into Nigeria. They should not be scrambling with other Nigerians asking Central Bank or individual banks for foreign allocation.
Abdulsamad Isyaku Rabiu and Ifeanyi Ubah cannot be faulted for raising alarm on Dangote. Any company that got 38 per cent of all allocations from a single bank as Dangote's Cement Plc for power plant equipment, Congo Cement and spare parts for cement plant machinery; must raise a flag for scrutiny. Anonymous importer claimed bank branches were hoarding and asking for 2 payments, debit and check for the same transaction: legal and illegal. Are Head Offices aware?
Innoson has pledged more local contents. Moreover, it is relatively new compared to our mega billionaires like Dagote and Otedola that are not bringing in hard currencies. We are also aware that some of the allocations to many of our billionaires are not for Nigeria but to build plants and create manufacturing jobs outside the country. There is nothing wrong with Nigerians' foreign investments. Indeed, we should encourage it. But bring hard currencies profits home.
In fairness to Dangote, he has published reduction in cement prices a few times, only to find it difficult to implement because retailers always claim they are still selling those they bought at a higher price. Yet we hear that Dangote cement sells at lower prices in other countries where his manufacturing factories were established with our foreign reserve. Even if Nigerians invest with loan from those countries, there would be some capital allocation from Nigeria.
Dangote has complained that he has to provide his own infrastructure in Nigeria where none or very little exist. This is why cement and other goods are expensive in Nigeria. However, when competing with the Chinese or in partnership with them in East Africa, they also have to start from scratch in the middle of nowhere. Yet the prices in those African countries are not as high as they are in Nigeria. In short, Nigerians are forced to bear higher prices than other Africans.
There are certain courses where it may be more appropriate to stay home and save us some hard currencies. It used to be that if courses were available at University of Ibadan, Lagos, Ife, Nsukka or Ahmadu Bello, you are grounded. Well student population has exploded but so are private universities. As outrageously expensive as those private universities are, they are still relatively cheaper than sending money abroad. Foreign currency fees here, is another kokoma.
Our worst parasites are the Foreign Portfolio Investors. Every country wants foreign investors, especially developing country like Nigeria. There are dire needs for infrastructure development with the help of foreign capital and expertize. So we would expect to gain a great deal from the investors willing to work with African countries with the hope that the dividends could be share in the long term. What we have are these FPI looking for short-term gain and pulling out cash.
Divestment by foreign portfolio investors from equities and bond market has devastated the value of our financial institutions. Any country looking for foreign investment would not want to restrict free movement of cash in and out of the country. The motive of the foreign investors is to speculate for quick cash. They are looking for emerging markets they can jack up, make quick profit and retreat with foreseeable sign of trouble. Colonialists in sheep clothing are back: big!
Over the years, we found out that most of the concessions to foreign investors as incentive: tax free zone, free allocation of land, generous low interest loans or grants drain local resources that could have been better invested in development. Government good intention to stimulate growth and encourage infrastructure has often resulted in encouraging foreign companies to compete with local entrepreneurs; they do not reinvest locally, they only repatriate their profit.
We must understand that the amount of money looted out of Africa and Nigeria in particular is more than enough to develop our countries. It is a double whammy, where Africans take loot and profit out just like Foreign Portfolio Investors. This sucks the blood out of our countries. We then wonder why we are regressing instead of making headways after all these years. If we can only see the silver lining in this dwindling foreign reserve, and reexamine our priorities. Great!
Some of us still remember the heavyweights involved during OBJ/Atiku Show, the Bank debtors scandal when our billionaires had to repay money they owed to save their name and then, the Oil Subsidy players. It is hard to vouch for our Billionaires, when top civil servants steal annuity. As if those were not enough, we were bombarded with Danzukigate. Of course all the naira and dollars floating around affect the price of garri. This is why prices of everything always go up.
When you ask the okada rider why he has to raise his fare for poor man, he blames the dollar. He claims that like everyone else, he has to buy in the same market. The prices of chicken, garri, oporoko, amola, etc. do not remain the same. One gets linked to the other somehow. Even landlords are now raising rents blaming it on the dollar. The other day at Bar Beach, pure water from local well went up because of the dollar. He asked: want water to be boiled with water!
When we heard that a big bag of tomato was selling for N300.00 in Katsina instead of normal prices of N5,000.00. We decided to travel all the way from Lagos to Katsina! Oh yes O!
Please don't laugh. When was the last time you heard the price of any commodity decreased so low? The only problem was we could not decide whether to take bolekaja, gbekilodo, molue, the train or fly by plane. We decided to sleep over it. On waking up the following day, each of us had decided on our mode of transportation. Unfortunately, we got word over the television that all the tomatoes had rotten for lack of storage.
Written by Farouk Martins Aresa.