· The major problem with the naira is not because the country is import dependent, it is corruption in the system, argues Joshua J. Omojuwa
· Ciroma Chukwuma Adekunle finally passed his West African Examinations Council (WAEC) papers in 2015. I know this because in 2016, Dikko Chinedu Oladapo replaced him on the WAEC document. Ciroma is now a businessman, often in Abuja in pursuit of government contracts. He will help us track the dollar’s journey in that city through the years, helping to show us one of the most understated diseases that keeps the dollar on the rise in Nigeria.
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· The barest excuse for the pressure on the dollar is, “we are importing too much”. Before you compare that to the import numbers of our peers in Africa, let’s look at importation for its own sake. Those who knock importation do not understand its place as an essential economic activity. Whether you are importing finished goods or importing production inputs — preferable — you are part of a value creation process that keeps the blood of the economy flowing. There is no rich country that is not big on imports.
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· Let’s take two separate examples. If you import a luxury product like a Lamborghini vehicle, your payment is made in dollars. The government makes some income via various charges at the ports. When the car gets sold, it is done at a profit, in naira. The seller pays salaries and rent which in turn end up in the hands of people who will most likely spend those earnings in the economy/put the money in the bank. The summary of that is, this a value creation process and not a destructive one. This argument is much stronger when the imports are inputs needed to manufacture goods in Nigeria. The long and short of this is, anyone who tells you importation is why we have a dollar problem is either sincerely ignorant or pretending not to know better.
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· Nigeria does not import near enough for its population. If we were a lot more productive as an economic entity, we’d import more. In 2022, South Africa had an import bill of $136.2b — more than twice our number; Egypt did $79b; Morocco $71.5b and Nigeria $60.4b. We do not have an import problem; we simply aren’t exporting enough. Despite the government’s efforts to ease the process of exportation for Nigerian manufacturers, the bureaucracy continues to hinder the process. Many Nigerians prefer making goods in neighbouring countries and elsewhere, primarily because it is easier to navigate their export protocol.
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· This is not even a piece about our meagre export numbers. As much as it is a bigger challenge as to why we always seem to have a foreign exchange problem, it would be an easier one to deal with if Ciroma did not have to be so enmeshed in a process that ensures his need for the dollar that has nothing to do with his value creation process.
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· As part of his bidding process for contracts, Ciroma must source dollars to oil his bid. In this case, he is not the outlier, he is the norm. So, he knows to get as much of the notes as possible. When he secures the contract, he must raise new sums to fast track the bureaucracy needed to land him the necessary documents. When it comes time to get paid, let’s say a N10b contract sum, he could end up converting as much as 40 percent of that into dollars, to again reward the people who made it possible. This is done after sorting the dollars that’d ensure the procurement process isn’t hindered at all, or with minimal fuss. A whole chain of forex needs with zilch productive activity. It is hard to quantify, so you can’t compare it to forex pressure induced by foreign school fees payments. At least we know which one isn’t a criminal enterprise.
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· This humongous daily festival of corruption is the norm. It is as real as the hills that surround Abuja and as normal as the trees that adorn its roads. It is the heart and soul of the city. And it is replicated across various state capitals around the country. Of all that ails the Naira, this is its greatest disease. Bankers know. They can draw a better chain than I have done here. Because they are the unwilling — and at times willing — facilitators of the process.
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· This is a locust that disrupts and destroys. Most of the dollars, when received via this unwholesome process, are kept at home, hardly expected to participate in any economic activity, until the opportunity comes to spend them abroad — or to get laundered.
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· The Naira may be our national currency; the US Dollar is our most potent lingua franca. That is the one language that unites Nigeria, across ethnic groups, nationality, political orientation, and religion. English may be the official language across the country, the dollar is the language of bureaucracy. This has become quite entrenched, so that when it does not happen should be deemed the anomaly.
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· The Central Bank Governor, Mr Yemi Cardoso, has done a great job helping to rein in the forex market. But for those interventions, it’d have been goodnight for the economy by now. There is no rest for him though because this is a design problem. Whilst the interventions seem to work, sustainability is the greatest challenge. This problem is like weed. It is there. It will always be there — except acted upon by a greater force. To counter it, you can neither sleep nor slumber. To be done with it, you must design a solution that is just as resilient and holistic.
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· Is Ciroma Chukwuma Adekunle the problem? I don’t know. Ciroma knows that culture trumps strategy. Whatever business strategy he’s got will always be moderated by the prevailing culture of the business environment. More businesspeople will thrive in an environment where this dollar bureaucracy becomes the anomaly. Until then, we’d all just continue to cry about the dollar, yet feign ignorance about the root of the problem. We know what to do; like we did with naira mutilation since 2007, then drew a line on that 17 years later.
Omojuwa is chief strategist, Alpha Reach/author, Digital Wealth Book
