'The monetary policy committee chaired statutorily by the central bank governor has done a lot of economic damage to Nigerians over the last couple of years, ranging from the mismanagement of Nigeria’s foreign reserves, to the abuse of the apex banks recruitment policies, to the inefficiency of its core function of over sight on the banks and many more. While Nigeria’s economic problems cannot be divorced from its political source, and our present economic predicament is clearly politically oriented, the worst thing however, that the apex bank under Emiefele’s watch has done against the economy is the DEATH SENTENCE passed on the Naira.
The Godwin Emefile led CBN instead of protecting the Naira murdered the Naira in cold blood and the country’s economy with it when he succumbed to pressure from interest groups like portfolios managers, and multi-lateral organisations such as the International monetary fund (IMF) and the World Bank to devalue the nation’s currency. The plot to devalue Nigeria’s currency was hatched from the boardrooms of Capital venture firms in New York and the board rooms of the International monetary fund in Washington. When Emir Sanusi in October 2015, through a CNBC broadcast implored the central bank to devalue the Naira and pegged Nigeria’s future economic growth and development to a devalued naira, I was genuinely scared for our Naira. I received it with terrible shock that sent shivers down my spine. Emir Sanusi, who was the apex bank’s governor between 2009 to 2014, went ahead to suggest in that broadcast that President Buhari would need help in dealing with the economy implying that he seemingly wasn’t getting enough from Governor Godwin Emiefele on monetary policies issues. I was scared because Sanusi Lamido Sanusi’s tenure as CBN Governor remains one of the best in terms of the strength of the Naira.
Sanusi defended the naira and saw to its stability through deft foreign exchange policies that included the use of forex supplies and official price pegging to halt the downward spiral of the naira. It is important to state for the record that when Sanusi was made the central bank chief on May 29th 2009, the naira was trading at 180 to a dollar at the parallel market. His predecessor had all but stopped selling forex to Bureau de Change operators and was in the process of implementing a controversial policy of selling forex to operators who had a minimal capital requirement of 500 million naira, there by leading to shortages of forex and that drove the price of the Naira to a dollar to 180 in the parallel market. When Sanusi took charge, he stabilized the market. He sold to bureau de change operators and reduced the capital requirement that was introduced by Charles Soludu while at the same time introducing a new regulatory framework to checkmate the excess of banks in forex dealing. Sanusi registered banks as BDC Operators and practically reconciled the official rate and the black market rate within weeks and eliminated what is referred to as round tripping. Sanusi spared no expense in defending the Naira as the central bank governor.
By February 2014 when President Goodluck Jonathan removed Sanusi from his exalted position unceremoniously and unconstitutionally, the naira was trading at 160 to a dollar at the parallel market. This proves that Sanusi Lamido Sanusi in actual fact left the naira in a better position than it was, when he assumed office and it was by design. So when Sanusi as Emir started making a strong case for devaluation and suggesting that President Buhari wasn’t getting the right advice, I employed my thinking hat immediately. Emir Sanusi is believed to have close links with the ruling All Progressives Congress. Emir Sanusi has been reported in the news with photographic proof as a guest of the president Buhari at least five times since he won the election. He even went on a lesser hajj with President Buhari and has shown that he has unfettered access to the President. So why the outburst when he could privately advice the President? The reasons which are as revealing as it can get are by extension the pressure element against Emiefele and the President by portfolio managers; and Emir Sanusi seemed to be a willing and interested tool.
Emir Sanusi is no longer a public servant in the central bank. He is an Emir and currently chairman of Blackstone and Black Rhino group. A venture capitalist firm that could gain from the devaluation of the Naira. When Ibe Kachiku announced the increase of fuel price to 145 naira I smelt a rat. It was the beginning of the end of the naira as we know it. Vice President Yemi Osibanjo insisted that subsidy was not removed but that the central bank had increased the rate of dollars to fuel importers from 190 to 290. I knew at once that the naira had been devalued. Newspapers reported the devaluation to the amusement of most Nigerians because our president had assured us several times that the Naira would not be devalued. He once asked a journalist a beautiful question, he asked and I quote “What is the benefit of a devalued naira to the economy” no one can give a cogent economic reason or justification for a devalued naira in an economic recession.
There are no economic indices anywhere on earth to justify it. Anyway, Emefele denied reports of a devaluation and insisted that the Naira was not devalued. I asked a learned friend of mine that if the Naira wasn’t devalued, then what is the rationale of selling dollars to fuel importers at 290 Naira to a Dollar? No answer was tenable until Emiefele summoned enough courage to let the cat out the bag few weeks later. Godwin Emefele finally announced on May 25, 2016 the much anticipated Naira devaluation. Bloomberg and CNBC reported on their economic news desks with fanfare that we have finally done the needful. Be rest assured that when those media organizations praise your economic policies, it may mean that their home countries are benefitting from it. Statistics from the National Bureau of Statistics weeks after the devaluation has proved that the nation’s economy has started reaping the reward of what the CBN has sowed.
The Central bank went ahead to do what portfolio managers from the west insisted they do before returning their investments to Nigeria. It is noteworthy that portfolio managers repatriated their investment last year when the President started showing glimpses of economic cluelessness in the face of a sharp fall in crude oil prices. This led to a level of economic uncertainty never experienced before and they took away their estimated $10 billion. It affected dollar liquidity in the economy. The Central bank displayed confusion in the middle of the crisis and the naira slumped as the CBN obviously didn’t have a plan to curb the liquidity.
These managers demanded that we float the naira in order for them to return their investment. These investments cannot be referred to as foreign direct investment in the first place because portfolio managers mainly trade on currencies and make money without really spending it. They move their money and trade when speculators ask them to and never invest in a factory or a farm. Portfolio managers do very little to improve a nation’s economy but specialize in capital flight which is a minus to any sensible economy. President Buhari has been reported to be unhappy about the devaluation, but the naira in Nigeria cannot be devalued without the consent of the president. A devalued naira is the first step in obtaining IMF loans and a condition that must be met for President Buhari to even be in a position to ask for such loans. In John Perkins Classic non-fiction, THE DIARY OF AN ECONOMIC HITMAN, he proved that such loans are meant to imprison a country economically and stunt their development forever. John Perkins had worked in different countries as an agent of these economic killing organisations. I am yet to see a developed economy that did so by such neo liberal destructive policies.
The case for a devalued naira is impossible to make in a country like Nigeria that produces almost nothing. South East Asian countries have over the years mastered the act of currency deviation for obvious reasons. Asian giants such as Japan and China have equally employed the devaluation tactics for export reasons. Because of the trading and economic dexterity of western countries, the only way they stand any chance to export is to devalue to make their products competitive and exportable in the international market. Western countries have for a while, sealed the faith of the Asians with dubious use of local and export subsidies as well as trade agreements amongst themselves. The Asian’s only chance is devaluation.
In Nigeria’s case we do not have an economic basis to devalue the nation’scurrency as we depend almost completely on imported goods from cholesterol free oil to toothpicks, from match sticks to mouth washes, we depend entirely on imported goods. How on earth can you devalue to sooth the aggrandizement of the IMF and portfolio managers to the short, medium and long term peril of our economy? The CBN responsible for the nation’s monetary policies and the Federal Government in charge of Nigeria’s fiscal policies have both mortgaged the future of our people and our economy to the interest of venture capitalist and portfolio managers from New York and London and to the interest of the International Monetary Fund in Washington.
This wrong doing is a stark reminder of the fact that our country remains colonized economically. This is evidence yet again that though we claim to be independent politically, Nigeria is as much a colonized country today economically as it was a century ago. These political and economic leaders of ours do not mind the consequences that their policies will bear on the average Nigerian because they feel secure and immune to the economic cancerous spell cast on our economy by they and their pay masters. Godwin Emefiele’s ill wind that he sowed on May 25, 2016 when he devalued the Naira has felt the depth of the soil. Oxygen and carbon dioxide have both acted on it as well as economic manure and vitamins. It has germinated over the last few weeks and it is now harvest and reaping time. We are currently reaping a storm from the ill wind sowed by the chairman of our monetary policy committee tasked with the protection of the naira.
The economic storm is brewing. Nigeria’s gross domestic product that was $510 billion dollars before the devaluation dropped immediately to $350 billion dollars after the devaluation. How do you justify a policy that reduces drastically the value of the entity? This has reduced the value of the nation, its wealth, its reserves in Naira, its local investment and has sharply depreciated the enticing factor in foreign and local direct investment. This is a fraudulent policy. HENRY BOYO, one of Nigeria’s foremost economic columnists described the CBN devaluation policy as an act of 419 on us all. No right thinking organisation or geographical entity depreciates the market value of the state.
The per capital income which is one of the most notable economic indices in measuring a nations standard of living was not spared. Nigeria’s per capital income was well over $1000 before the devaluation. But the per capital income of Nigeria today is less than $600 after the devaluation. This means that the average Nigerian has lost about 50% of the value of his income and the value of his money as well as the value of all his investments. HENRY BOYO and most economic analysts put the value of the loss at 60%.This simply means that every Nigerian is 50% poorer today due to this sacrilegious policy. This is a pure case of spreading poverty. Statistics from the national bureau of statistics show that out of the over 17 trillion naira in Nigerian banks, over 90% of depositors have not more than 25,000 naira in their accounts with 2% of the depositors having more than 500,000 naira in their accounts. This shows that poverty is entrenched in Nigeria and Emiefele’s devaluation has just increased real and scientific poverty by at least 50%.
Nigeria’s present economic woes cannot be put to the door step of only the presidency and Governor Emeifie’s CBN but their policies have worsened the economic situation they inherited and have taken it to a new high with the devaluation policy. President Buhari asked a brilliant question three months ago when he insisted he would not allow the nation’s currency to be devalued. He asked “what is the benefit of a devalued naira to our economy?” Perhaps that’s the most brilliant question he has asked since May 29th 2015. None, he said. He was right; there is no rationale economic reason to devalue one’s currency. But like he has shown all through his presidency, his ability to stick to his guns in the face of immense pressure and intimidation tactics has been proven time and time again to be fallow.
Our Government seems to lack the depth and conviction to pursue and stick to a homegrown economic dependency and rationale policy. The value of Nigeria’s stocks traded at the stock exchange was not spared of this economic carnage. If Nigerians actually know what they have lost to devaluation of the naira, they would probably take to the streets to protest. The value of all stocks traded in the stock exchange was $48 billion dollars before the devaluation. Today, the value has dropped to $25 billion dollars. Our much touted pension funds of $25 billion dollars lost $10 billion dollars in value immediately. Tell me is this is not a heist.
How can a government accept a policy that would subject hard working Nigerians to lose 45% of their life savings in pensions? The Nigeria customs in an announcement last week notified the public that duty would be calculated by 290 Naira to a dollar and no longer 190 to a dollar. This means that clearing cost has gone up by at least 50% in a country where we depend almost entirely on importation. What exactly does this government intend to achieve with this diabolical devaluation policy? The fate of the Naira has been sealed and our leaders have acted as willing tools in the hands of portfolio managers and multi-lateral organisations such as the International monetary fund. In doing so. My country’s economic future is looking extremely bleak and the death certificate of the Naira, I presume has been written.'
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