Operation Save the Naira


Les Leba

In a fine demonstration of corporate social responsibility, the Vanguard Newspapers, last Wednesday convened a Town Hall Meeting to address the issue of the naira’s rapid depreciation in recent past months.  Vanguard’s noble effort must have been borne out of recognition of the pervading impact the naira value has on our lives, and the sustenance of a dignified level of social welfare for our people.  In other words, Vanguard Newspapers obviously recognized that there is a close correlation between the poverty of our people and the declining value of the naira over the last three decades.  From a personal perspective, I recall my enthusiasm to return home over thirty years ago after the completion of my studies in the UK.  The zeal to return home was not only the result of the excitement of seeing my family and friends after almost a decade’s absence, but the real pull was the reality that the job I was offered at home in Lagos did not only have the potential of being more fulfilling, the total remuneration package was better than anything I could have been offered in the UK! 


I recall that, after six months on the job, the company I worked for, as was the tradition at that time, gave me a loan to buy a brand new Peugeot 504 GL series with all the accessories, including air con, fine leather upholstery, tinted glasses, etc, etc.  I recall the amazement of a visiting Director of a UK medical equipment company in which I did an orientation course before returning to Nigeria when we visited customers together in my chauffeur-driven “limousine”!  When he could no longer contain himself, he asked how I managed to acquire such a fine car with a driver less than 12 months after returning to Nigeria.  Of course, I realized that his consternation was the result of his own reality back home in the UK, where he maintained a ‘jalopy’ that was over 10 years old, even after over 12 years post University professional experience!  I calmly responded to his inquiry by informing him that my employers gave me a loan to buy the car!  I recall that in a sniggering tone, he wondered how I could afford to pay back the loan!  He almost fell off his seat when I blandly replied that my employers also gave me a car running allowance every month and that the allowance was not only sufficient to pay back the car loan in three years, but was enough to also cover all running and maintenance expenses every month!  I bet, at that time, this UK director of a successful medium size company must have wished that he was a Nigerian!  Indeed, Nigerians commanded respect wherever they found themselves anywhere in the world.  In fact, those Nigerians who lived eternally abroad, were usually those who secretly considered themselves as failures because they could not complete their studies and were yet to capture the Golden Fleece!  My dear readers, this was a time when you required almost US$2 to buy N1!!!


Over the years, the road to deepening poverty for our people has closely aligned with the depreciating value of the naira from its position of strength to its current lowly (but still falling) rate of almost N150=$1!  Obviously, thirty years ago, the naira was the currency of choice and the black or parallel market was hardly existing as we know it today!  Even the humble airport taxi driver would refuse payment in dollar from a ‘JJC’ from abroad and would most certainly prefer payment in naira!!  How times have changed!!  Thus the Vanguard Newspapers sponsorship of the “SAVE THE NAIRA” campaign must be seen as an altruistic attempt to diagnose the cause of the downfall of our currency and the parallel collapse of an economy and a once fledging industrial landscape where over 100 textile companies thrived competitively, alongside other industries such as paints, biscuits, breweries, motor cycles, automobiles, tyres, etc. 


The IMF-induced Structural Adjustment Programme, which included a major devaluation of the naira, predicated the beginning of crisis on our industrial landscape, and regrettably, we are yet to recover after over 20 years from the devastating blows of that ill-conceived IMF panacea!  The IMF and neocolonialist Western Europe surreptitiously promoted the slogans of “the naira was overvalued”, “Nigeria was under-borrowed”; the military dictatorship, (with the exception of the  Buhari/Idiagbon regime), who craved international acceptance, were more than ready to sell the soul of our country, if the West would condone their perversion and their blatant rape of Nigeria.  Indeed, the same process was engineered and promoted in several African countries, since the early 1970s.


The recent deliberate devaluation of the naira appears to be a reflection of the massive devaluation of the mid 1980s and its devastating impact; Nigerians may be forgiven for being apprehensive that the economy is set for another nosedive which may obliterate the vestiges of the real sector, particularly the small and medium scale industries, which form the backbone of most successful and fledging economies worldwide and consequently precipitate worsening levels of unemployment, mass suffering and insecurity.


The Vanguard Town Hall Meeting must have been conceived with much hope of arresting the continuous decline we have suffered in the last 20 and more years, as a result of a depreciating naira and apparently mismanaged economy.  It would be over ambitious to expect that a loosely structured three-hour session with speech presentations from about ten speakers including over half an hour taken up by a verbose moderator and another one hour or more of self-adulation by the chief guest, the Central Bank Governor, not to forget another 20 minutes of unanswered questions and contributions from the people in the hall!  Fortunately, the guest speakers themselves came with very little to say in terms of a seriously considered structured response to the problems of the naira in particular and the Nigerian economy at large!  Basically, the contributions from the guest speakers generally hovered around well worn clich├ęs, like “our economy is weak because we have depended on only oil at the expense of other abundant mineral and agricultural endowments” or the enduring slogans of “we must diversify our economy, (the government should embark on providing appropriate infrastructure” and “we need public/private partnership to grow the economy”, and “government must provide stimulus package” and “the CBN cannot revamp the economy by itself without appropriate fiscal complement”, and “we must control imports, etc, etc.”


Even the hilarious response to a call for printing more naira to solve our current problems was not couched on a foundation of a valid hypothesis but the bravado of the presenter almost brought the roof down!  I know that I will also be guilty of self-adulation when I say that the only structured presentation which attempted an in-depth analysis with a PowerPoint presentation was stampeded and summarily shot down by an impatient moderator less than eight minutes into the session, even when the people in the town hall (read as the wishes of the people) in a unanimous protest called for the completion of the presentation!  The wishes of the people, military style were trampled upon, in spite of the well-known democratic posturing of the moderator! 


Truth was consciously sacrificed on the pretext of time, for which Mr. Moderator, himself, showed no respect when he embarked on a thirty-minute spell of jokes and storytelling, which added nothing to the object of the Town Hall Meeting!  Mr. Jimoh Ibrahim, Chairman of NICON sympathetically indicated that if it was allowed, he would part with his time allocation so that our presentation which he felt showed some promise could be completed.  The CBN Governor, in his response, magnanimously regretted that the Les Leba presentation was summarily halted and wished he could have been afforded the opportunity to listen through our logic.  Nonetheless, he instructed his assistants, who were present to arrange a meeting in Abuja where he and his team would listen to the full presentation and thereafter rub minds to discover whose position accommodated superior logic!


Thereafter, I commended Prof Soludo’s open mindedness to a colleague, who, however, remained unimpressed as he believed the young man was playing to the gallery; afterall, my friend noted, “you have been writing and saying the same thing for over six years, why has the CBN Governor only accepted to rub minds with you when he probably has less than one more month in office?”  “In the event that he gets a second term in office,” my friend insisted, “you may in fact continue to write for another five years without any attention from that gentleman!”  Regular readers of this column are well acquainted with my position with regard to turning around our economy and adoption of a market determined rate of exchange for the naira.  Since we still live in a relatively free country,


I will attempt to transcribe into regular prose the schematic flow in the PowerPoint presentation that the ebullient moderator of the Vanguard Town Hall meeting did not want you to hear for reasons best known to himself, but which certainly could not be for any altruistic public interest.  For now, we will conclude this week’s article with an introduction of the table of content of our presentation for the Vanguard-sponsored “Operation Save the Naira”.  We will begin by looking at the merits and demerits of a stronger naira; in other words, is it better or not for the economy if the naira is stronger or weaker than it currently is?


We shall proceed therefrom to identify the major cause of a weak naira as poor management of money supply.  We will subsequently examine the impact of poor management of money supply in the determination of economic development and poverty reduction.  We will demonstrate that the bane of the management of money supply is the unilateral substitution of naira for distributable dollar by the CBN every month.


Finally, we will examine the positive impact on both the naira value and the whole economy of the adoption of dollar certificates for the payment of dollar-derived revenue in allocations to the three tiers of government and conclude with suggestions of complimentary policy directions which would help to revamp the economy and greatly reduce poverty in the land.  We will also indicate why our proposal will answer the paradoxes in the Nigeria economy and provide solutions to the unending calls for a diversified economy, private/public/partnership, low interest rates which are conducive for industrial growth, reduction of inflation, increased employment, etc, etc; indeed, we hope to show that the economy can begin to turn around within six months of the adoption of the strategy of dollar certificates.  Keep a date with this column next week!


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