Naira: 20 Years Of Devaluations Without Benefits;
The Vexing Issues Of Our National Currency
Paul I. Adujie
New York, United States
Naira, our national currency was stronger than the United States currency, the dollar, by a factor of two, when I first came to the United States in the 1980s! Thus, it took less than five hundred Naira to purchase my air ticket to the US at the time. Since then, so much has changed, including the fact that, airlines, started to demand payment in dollars or some other foreign currencies, because we have so devalued the Naira. Since September 30, 1986 when the Structural Adjustment Program or SAP was foisted upon Nigeria by the president Babangida regime, our Naira, our national symbol and strength, just like our flag, has taken all sorts of severe beatings! The Naira has endured a plethora of unannounced-devaluations, the Naira has been allowed to plummet in unprecedented free-fall, for a national currency.
Epitomized in these unannounced, multiple devaluations of the Naira since 1986, are the gullible and robotic acceptance of economic concepts concocted by the Western powers, and institutions, ‘solutions’ recommended to our officials by our Westerly trained eggheads, who always appear too eager to betray our national interests, as the only way to establish or prove their understanding of western economic precepts, to their western mentors. If Nigerian leaders and economists and other advisers, accepted these punishing ‘solutions’ in good faith, at the behest of persons and institutions outside Nigeria, but, since these ‘solutions’ have yielded no results, after 20 years of trying them, should we not have change course already?
Foreign Economic Precepts And Concepts, Aped In Robotic Manner?
How else would anyone explain, the precarious position, that our national currency has been since the 1980s? All things being equal, as economists say (but all things, are hardly ever equal!) the devaluation of a national currency ought to discourage imports and ostentatious consumptions, while encouraging or spurring exports, but our national experience is the exact opposite, devaluation has resulted in capital flight, instead of inflow of foreign investments.
The multiple variables and vagaries of the global economy are never equal, Argentina, Bolivia, Brazil, Russia, Venezuela etc. are examples of countries, where economic policies concocted in America and Europe has not helped local situations, countries where imported precepts has had crippling effects on nations and peoples, will Nigeria be different at the end of the day? In America, a common joke among commentators, is that, if you ask four economists questions regarding economic forecasts, four of them will give, five different answers, this is because economic is not an exact science with mathematical precision, why then, do our policy makers stubbornly adhere to Western economic precepts, so tenaciously? As if these precepts and concepts are infallible?
Presently, most countries in the Caribbean or West Indies, without comparable exports, such as Nigeria, still manage to have better exchange rates, not because these Caribbean nations have better industrial base, or production capacities or better anything per capita, even Haiti, the so-called poorest nation in the Western hemisphere, has better exchange rate paired with US dollar, as compared with Nigeria, Haiti has no exports, no tourism and does not have stable polity, why is the Naira so devalued, what is the benefit? Who does it benefit, if there is benefit at all? There are still all manners of frivolous and conspicuous consumptions, from imported orange juice to newly rich lawmakers jetting into America and Europe to buy five luxury cars per year, how many cars can one Nigerian senator drive at once?
What Role Banks In Nigeria Play Naira’s Poor Health?
Most Banks in Nigeria have been playing the roles of mercenaries, in contributing to the poor fate of the Naira, these banks do not grant loans for the start of industries, factories, or farms, these banks do not grant loans for the pursuit of higher education, these banks in Nigeria, charge usurious rates, when and if they grant loans at all.
The only product or service, (note the singular in product or service?) banks in Nigeria seem to have specialized in, is foreign exchange currency sale, and endless speculations, and more speculations on foreign currency, depreciating the Naira and depleting Naira and invariably, Nigeria’s respect, and economic progress and development. Banks in Nigeria have been making profits without producing anything, without spurring the economy, banks in Nigeria must bank on Nigeria, present and future.. Making Nigeria and Naira respectable, is a collective effort, individual Nigerians and good corporate citizens in Nigeria.
Consequences Of Failed Policies
Some of us Nigerians, go to bed weeping for the state of our nation and our collective paltry national fortune, weeping for our motherland/fatherland unending plights and predicaments…. BUT a great number of those elected/appointed to be in charge, with singular opportunity of duty and responsibility to change of national fortune positively, are perpetually asleep at the steering?
On matters on our national currency, the Naira, different administrations have tried different economists, and sundry economic or financial experts, from Ciroma, Okongwu, to Kalu Ndika Kalu to Kpakol, to and now Okonjo-Iweala, with varying western economic model imposed ranging from Forex, Second-Tier Market to the tried and now re-tried Dutch Auctions, all to no avail. Nigeria’s major or main export remains 90% petroleum and petroleum ancillaries, where then is the increased imports during this past 20 years or since SAP was introduced? Why must Nigeria continue to inflict these slow-motion punishing economic death sentence on our citizens? How can we be doing the same thing, getting the same results since 1986 SAP introduction, but we continue to devalue the Naira, officially and unofficially? Should we not rethink or become more innovative in our economic and fiscal planning?
Repeating Failed Policies Or Steering The Economy Well For Us And Posterity
The smart course, is to become more radical, and encourage local ideas and inputs! Has the World Bank, IMF and Breton-Woods institutions not disappointed us enough? Is it not the case, that insanity is defined, as doing the same thing repeatedly , and expecting different result? Nigeria has aped Western economic precepts long enough, enough torture of the people.
Careless Pronouncement Galore And Business As Usual?
Why do we have Mr. Soludo and Ms. Okonjo-Iweala making frequent public statements, weighty statements, regardless of the volatility of our national currency, the Naira and the effects that the public statements these officials have on Naira? Our public officials must desist from making off-the-cuff remarks, our officials must make contemplative, deliberative statements, only, after deep reflection and circumspection, cognizant of every impact and consequences.
Our public official must desist from making careless, unguarded, reckless and insensitive Gaius Obaseki-like statements, a la making elephant size sacrifices, living in a five star hotel for five years, with room service and all? Somebody should inform President Obasanjo that I would like to head the NNPC without pay, just so, Gaius Obaseki understand the true definition of sacrifice, Adujie is willing to head NNPC without pay, and considers it a privilege of a lifetime to serve my country, and change Nigerian lives positively! Improved service, improved lives for all, is enough pay or reward, honored name for excellence will be enough reward in itself! Even still, without pay, I will not call that sacrifice.
Part of the challenges that we face as a nation, are that, those entrusted with power and position to change our national course, our national destiny and prosperity, these people are too often, consumed with self-aggrandizement. When are some of our office-holders in Nigeria, going to realize that serving and protecting Nigeria’s national interests, is the same as pursuing every Nigerians’ individual interests, but in a collective sense?
All for one Nigeria, one Nigeria as an umbrella, protecting all of our collective interests, as opposed to, office holders pursuing their selfish interests, at the expense of all Nigerians; What is it then, going to take, to convince the senator from my hometown and yours, that he cannot possibly drive a Lexus and Cadillac Escalade at once, or that he cannot drive a Mercedes Benz and a Jeep at once? When are our office holder going to realize that power entails more than raw bravado of power, such as delivering Suya to a married senator’s girlfriend in siren led convoy, or going to private parties of owambe and ariya in siren led convoys, apologies to Dr. Ruben Abati of The Guardian Newspapers.
Or better still, how do we convince our senators and other elected officials, that Nigeria need good roads for effective and efficient public transportation system, including good roads for the law makers to drive and enjoy their newly imported, many multi-million Naira luxury cars? Just as Nigeria also need a buoyant economy with full employment, so that full employment would serve as distractions or even full retirements, for would-be armed robbers and so, our senators’ cars won’t fall pray to armed robbers, some of these armed robbers are actually average Nigerian citizens driven to robberies and other crimes by economic desperations, poverty is certainly a major factor in the rising crimes, there is a direct correlation between crimes and high rate of unemployment in an economy that has been depressed for more than twenty years.
How many children of the retired members of our armed forces are criminals of the robbing types? The reason that rich kids are not robbing other people and banks violently, is simply because they have what they need, guaranteed. Those who resort to crimes are mostly driven to it, like I and other Nigerians are driven abroad as economic refugees, exiled by SAP and the continuing poor state of the Nigerian economy and the continued slide of our national currency, the Naira. Most Nigerians overseas wish they were home, or that the economic situations that drove us from Nigerian shores have changed, for those at home and for those of us outside to return to, I personally wish everyday, that I was somewhere in any of the thirty-six states of our federation or in Abuja.
It is not my desire to live the rest of my days anywhere outside Nigeria, I mean anywhere outside Nigeria! But it is increasingly looking like that, for far too many Nigerians, spending the rest of our lives overseas! Money is no place like home! Living abroad because I have no choice, is not, what I want! I will as soon return to Nigeria, if I think, that I could survive the economic struggles in Nigeria. Why are so many, too many of our elected and appointed officials not appreciative of the power that they posses? The power to do so much for so many? The office they hold are phenomenal sacred trust and opportunity to serve, and this is a momentous time in Nigeria politically and economically, to lift Nigeria up and leap to greatness.
Enhancing Production Capacity And Encouraging or Stimulating Export?
Nigeria’s production capacity has actually shrunk during the preceding 20 years, Nigeria actually import more, oil still remain our major export to the tune of 90%, Nigeria’s national debt has actually increased, Nigeria’s debt burden has not been removed or forgiven, Nigeria actually commit a good percent of national income to debt servicing, foreign investment has not been flowing in, as expected! So, why are we continuing to pursue these bitter quinine economic precepts? Policies that has destroyed lives, caused brain drain, debased morals for a whole generation, caused mass unemployment and attendant upsurge in corruption and violent crimes? Why are Nigerian leaders and the ‘expert advisers’ leading us through these economic suicide, SAP and the new policies could not have been worse, even if concocted by our enemies or a group of foreign intelligence dedicated to our demise.
Economic development matters are national security issues, hence the World Trade Organization meeting in Cancun, Mexico failed, it failed because the self-interests of America and Europe, collided head-on with the interests of developing countries, free trade and all the Western economic theories meet realities of national interests of the West and free trade theories, usually recommended by the West as unassailable, were quickly jettisoned.
Hence Westerners did not yield to the developing countries at the WTO meeting, hence America imposed stiff tariffs on imported steel, when it suited American national interests, national interests, also dictate the behavior of American government, when it releases petrol, from petroleum reserve, to quench the American public unquenchable appetite for petrol, and American government at such times, is quick to abandon any pretensions to free market, or the preachment of allowing market forces of demand and supply, control prices of goods, including petrol.
American government is quick to directly intervene in the market place, be it steel or petrol, when there is any hint that suffering and hardship on a large scale, might afflict American citizens, but when it is about Nigeria? Americans and Europeans and the Nigerian policy wonks trained in foreign economic precepts and gullibility, are quick to tell us, that, tightening our belt, or obeying SAP, are necessary bitter pills, sufferings and hardships, that Nigerians must endure?
How long is it going to take for Nigerian policy makers to realize, that, there is no such thing, as free trade, free market when national interests are concerned and when mass sufferings and hardships will result, no matter what some may claim to the contrary. The Americans and Europeans seem to be saying to us, do what we say, even though they practice something entirely different, when their national interests are at stake?
Our people need to wake up! Our elected officials should stop the luxury cars buying sprees, just as they should demonstrate absolute confidence in our political and economic systems, by ending the renewed and unabated repatriation of Nigerian monies and resources to overseas hiding places, speculations are high about the speed and stampede, at which Nigerians are sending monies from Nigeria to everywhere outside Nigeria to hide in foreign accounts, to buy homes in America and Europe, because investments are “safer” outside Nigeria? Public officials buying too many luxury cars beyond the value of their salaries and allowances, why do some Nigerians need 10 luxury cars per household? Why don’t some Nigerians of expanding production capacity, by building factories etc The spiral of the Naira will stop.