“What ails the Naira is a combination of reckless fiscal wastefulness and stupid culture of looting atop a one-commodity economy that is at the mercy of the global demand which is in control of its pricing structure. In other words: Nigeria helplessly operates on crude oil as its lone economic commodity from which it derives over 80% of its national revenue; world demand dictates the price it will pay for the Nigeria crude oil; Nigeria meanwhile spends over 70% of its yo-yo revenue on recurrent capital expenditure which includes unsustainable cost of its political system; the remaining 30% revenue, Nigeria cannibalizes unconscionably; all of this in the midst of a horrific 6-year civil war in every single week of which Boko Haram kills citizens in hundreds and banishes the weak and the injured in thousands out of their ancestral villages! How the heck could Nigeria be in control of the value of its currency or how could Buhari stop the resulting inevitable economic crash without containing and making a dent on any of the major national malaises some of which were enumerated above?
So far, the Central Bank Governor, Amafiele, has tried all the inferior gimmicks and trickery in the books to prevent the Naira from reaching its true strength against the dollar in the global currency marketplace. These include: capping dollar trading at national stock exchange trade sessions, emptying of national reserves to recapitalize and shore up the Naira at NSE trading, stopping government offices from dealing their primitive contract awards/executions culture in dollars, stopping payouts from private customer domiciliary accounts in dollars, etc, but all to no avail. It’s all been like attempting to catch a falling knife. Suffocated Naira continues to seek air.
To pull up and maintain any national currency at a preferred level is a serious business! In the absence of major shocks to the existing hocus-pocus national economic abracadabra, such as expand the economy to churn out more commodities in addition to crude oil, achieve reasonable containment of Boko Haram and save big on the draining national security budgets, plug the ubiquitous economic leaks in our massively corrupt system and recover sizable chunks of stolen public finds, establish forward looking public policies on which to spend the savings, etc, all of Amafiele’s ongoing charades will not put the Naira genie in a bottle, even, in a decade.
None of the major surgeries mentioned above will take less than a minimum of one year to see effect at best, the entire 4 years of Buhari’s first term if we are lucky. Other than that, like the electron running for dear life in its orbital shells, Naira will continue to look for the next stable energy level which could be tantamount to any bales of Naira to the dollar, no matter what frivolous trick we might still foolishly conjure. We might continue to think that begging the world to come fight Boko Haram for us would stimulate our currency rather than going on all fours in all-or-nothing combats to achieve our long delayed national insecurity, ethnic harmony and serious national development programs for generation of home grown technology, mass access to jobs, food security, water, housing and health care, it won’t wash, Naira won’t be so easily fooled. Naira, like our crude, is more sensitive to what others are willing to pay for it rather than what we are willing to receive for it.
The excerpt posted above was clipped from a thread in the conversation related to the precipitous devaluation of the naira relative to the US$. The conversation is all about who or what to blame for this. In an import-dependent monocultural economy like Nigeria, the average citizen gets more impoverished every time the exchange value of the naira declines. Some blame the drop in global price of crude petroleum due to glut caused by increased production of the commodity by OPEC. Some see the problem as “structural” in nature and thus cannot be readily amenable to quick and easy solution, irrespective of whatever or whoever ultimately gets the blame. Yet, many others see the “laziness” of the incumbent Buhari administration as the culprit.
Let’s look at this matter from another angle. Rather than try to micro-target the objects of our blame, let’s look at the Nigerian superstructure as that of a big house which is in the process of collapse. First, there are well-known structural failures which underscore the instability seen in all aspects of the typical Nigerian’s daily life. False prophets and “leaders” have arisen because they’ve promised to right all wrongs as well as arrest and reverse the rapid decline that abounds everywhere one looks. The relentless drop in naira exchange value, despite some spirited efforts being made by the Central Bank to stem the tide, ought to be seen as indicative of the terminal phases of a building whose foundation and other related support structure have become overwhelmed by the force of gravity. Gravity is ubiquitous, persistent and unforgiving. Once in its grasp, a collapsing edifice is destined to end up in a pile of rubble sooner than later.
With the ongoing inexorable collapse of the economic prop, which is the only pillar sustaining the country’s national cohesion and identity, the next few years might, in fact, be the end of times for Nigeria as a unified sovereign nation state. As the benefit of Nigerian citizenship continues to decline precipitously for millions, the diverse interest groups that constitute today’s Nigeria shall increasingly believe that they can fare a whole lot better in seeking self-willed alternative routes to assure their own self-redemption and survival since the big illusory national tent is collapsing and no one appears to have the will or capacity to stop and reverse the trend. Some have recently invested a lot of the hope in electing Buhari and a new ruling party believing that the change which the duo have promised shall soon come to rescue Nigeria even at the edge of the precipice. Finally, the chicken are coming home to roost. It is easy now to perceive a sense of disillusionment across all the socioeconomic strata of Nigeria as the promise of change has turned into a mirage with each passing day.
Commonsense should instruct the average Nigerian to overcome the allure of a promise which shall never be fulfilled due to a plethora of reasons already touched upon by the discussants in the preceding thread. Nigeria has failed simply because it was ill-conceived from its very start, the Amalgamation of 1914. The founders of “One Nigeria”, at Independence, wisely opted to administer the sovereign new Nigerian nation through a federal constitution based on semi-autonomous regional governments. Nigeria, despite its many drawbacks, managed to work like a charm during the 1st Republic. But then the Army struck, swept away constitutional federalism and in its place, imposed a centralized command governance for the entire country; this is still the model that persists till date. This centralized national administrative mantra has, over the decades, spurned societal antipathy and widespread corruption which have since eaten deep into every fabric of the Nigerian society. And the Nigerian house is collapsing inexorably as emblemized by insecurity of lives and property compounded by the shrinking purchasing power for the citizenry. It is time for we the people to exercise the right to self-protection inspired through self-determination.
This is the time to accept and implement the well thought-out plan by Movement for New Nigeria (MNN) to divvy up the country’s geopolitical space into four emergent federations namely: Yoruba Federation, Lower Niger Federation, Middle-Belt Federation and the Sahara Territory Federation. This is the new realistic option for rebuilding the hope of tens of millions of folks who are currently entrapped in a swift torrent which is destined to take everything with it to the bottom of the abyss.