Nigeria should work towards making the west and central Africa’s economy work, writes Victor C. Ariole
The arbitrary management of arbitrary rules is hardly the main risk in the fourth world […] when financial crisis looms, money tends to flee in three phases: large local investors moving money through underground channels, foreign creditors, then foreign investors in the local stock market… Ruchir Sharma (2012).
When Aminu Gwadabe tells you that there is a stock of $6billion waiting to be repatriated based on when dollar is available, then know that Nigeria is about to face the reverse of what Sharma is talking about; that is, by-passing first and second phases and landing to third phase. He even warns that Nigeria must think fast before IMF start recalling its own funds; CBN knows better.
It was a delight listening to Aminu Gwadabe, president of Bureau d’Echange on Channels TV. He complained about how evil forces were, as at now, determining the exchange rate of the naira as against market forces determinants. Not far distance I overheard a professor of Business extolling Abacha Regime on exchange rate stability on STV. And it made me wonder whether the new normal, out of Covid-19, could be determining price by evil forces and no more market forces. When you compare also CFA zones – central and west Africa – with naira, one could see the effect of the two forces – evil and market forces.
Notwithstanding what people say about CFA and colonial master’s intervention, it has remained quite stable, and even appreciated against the dollar at the time naira had failed to sustain itself. Somehow, it was not a surprise when Abacha, who was a recluse, decided to join the Francophone countries in Ouagadougou declaring his preference in associating with them so as to be better secure, both socially and economically, than associating with the Commonwealth. He made the journey himself, not delegating anyone. Today, that group is asking Nigeria to fast-track ECO currency, and Nigeria is foot-dragging, as more of evil forces, ironically, enter into deciding the naira exchange. See the plummeting rate of Nigeria’s reserve and how the fundamentals are crumbling. Gwadabe is worried that even when economic activities are at a very low ebb, the demand for dollar is making the naira enter into bad money zone. According to him the naira stock on his group, now, is waiting for CBN’s dollar supply to repatriate $6billion of investors’ money.
And $6billion is almost the size of Nigeria’s recurrent budget as if service industry of foreign component is on cannibalisation drive of local assets. The interesting part is that Gwadabe is pleading for government to take good care of Nigerians outside who had made Diaspora remittance the mainstay of Gwadabe’s business group in Nigeria. And, so it was when Abacha regime was on. It made people, individually, look for outside help as Nigeria was almost blacklisted. That dimension of looking out of the box, and its multiple streams are yet to be understood by government; and it says why government is not investing enough in human capital. “Andrew movement” of the time, as brain drain, actuated, then, proved helpful; even as it turned out as part of the expression of evil forces with evil rule processes in Nigeria; rules that make people despondent to the extent that evil forces thrived.
Most Nigerians that still feel committed to Nigeria and remit money homeward are a mix of educated ones who gained their competitive capacity in Nigeria, especially Nigerian trained medics, great professionals who are sympathetic with those who enabled their economic growth – parents especially. Even the stowaways (those who emigrated with no aim) never reckoned with, who still intend to invest in Nigeria and think of safe investment that could enable them return with confidence to Nigeria must be protected wherever they are. They need government support to keep thinking well about Nigeria.
Gwadabe thinks that most of them (being part of the first in Sharma’s scale) are buying back available dollars in the market and creating scarcity of dollars; or, that as no business is viable in this Covid-19 ‘darkness’, there is need to re-stock their dollar wallet waiting to see how government intends to re-start the economy. This is where the mono-sourcing, (the oil money) of foreign exchange makes Nigeria “big for nothing” in the midst of other small countries of the Francophone extraction who are doing relatively better, latching their economic conduct on the dictates of CFA linked to euro and are asking Nigeria to learn, fast, all the economic discipline that could make Nigeria’s indices converge and join them to raise the flag of ECO; and even lead the whole sub-region’s economy. As, allegedly, evil as Abacha was portrayed, he had envisaged a better relationship with Nigeria’s Francophone neighbours than any known Head of State, and if it had been sustained, so as to determine real points of entry into ECOWAS or/and central Africa, the menace of Boko Haram would have been outside Nigeria’s immediate borders, and would be too far off to Libya and Sudan. It is the same way the economic space would have been opened to allow more activities and open room for the creative Nigerian people. Workforce in Nigeria is looking greatly for openings to express itself and it must not be stifled.
Like Abacha’s period like, unconsciously, what Nigeria is relapsing to, as CBN tends to operate like the CBN of Paul Ogwuma, who currently is at his sickbed, in Abia; like also the operators then who, indeed, played the game of “let keep reserve in many banks out of USA and IMF reach” as if thinking like children; that is, Finance Minister, Ani and Petroleum Minister, Etete. The two people working on Nigeria’s wealth then. Quite childish tactics in a shark infested economic ocean of the world. Today Etete is hounded as well as Ani; both, also, very rich people, leaving Ogwuma in distress. CBN should learn the lessons fast as stashing away money seems rampant now.
Today, it is obvious that the Finance Minister is not completely in control and, possibly, someone is doing the “evil force” work. It is evident by how covid-19 palliative contributions from external donors are being handled and how re-starting the economy is taking the shape of “politics first before economics”.
Côte d’Ivoire has opened its economy, and it is the leading country in the Francophone zone and it has asked others to key into the ECO currency operation via UEMOA (Union Economique et Monetaire de l’Ouest Afrique) well thought out details.
The move is obeyed. Gabon, in central Africa, is contemplating following suit, not minding Cameroon’s stance as it behaves like Nigeria. Nigeria should intervene quickly and align all efforts towards making the west and central Africa’s economy work, as a step towards making Africa work. No ego. No bigmanism. The populace of Africa looks forward to a better living before more deadly attack of deprivation is actuated by sharks of this world against the continent. Exchange rate must not make Africa’s currency a bad one. Economic activities, based on exchange rate speculation, are evil to the suffering populace.
Ariole, is Professor of French and Francophone Studies, University of Lagos