President Muhammadu Buhari is about making same mistake his predecessors, particularly Shehu Shagari, Olusegun Obasanjo, and Goodluck Jonathan made, if care is not taken.
He has elected to listen to the advice of his horsemen and soothsayers- people who pretend to know the economy better than others; people who want to use their closeness to the seat of power to achieve primordial objectives; and by doing so, pitch Mr. President against the populace. .
These self-acclaimed masters of the economy would as soon as a new administration comes into office reel out a number of suggestions on how to ‘move’ the economy forward. But take a good, closer look at their suggestions; you would realize that such suggestions were designed to benefit them and their business interests. That was the type of role some business moguls that served on the economic team of former President Jonathan did. Most of the policies they cajoled Jonathan to approve were for their personal benefit. It was not surprising to hear Jonathan tell the world in a LIVE television programme that, “ Dangote told me this about Cement, Otedola told me that about Oil’ , Okonjo –Iweala said so, so and so about foreign reserves and finance” and ‘I have no reason whatsoever to doubt them”. Today, where are those soothsayers? Will Jonathan, out of office, openly praise the wisdom of his famed “Wisemen and Women”? Many of them switched loyalty to Buhari immediately Jonathan lost election.
Another set of soothsayers have surrounded themselves around President Muhammadu Buhari with all sorts of advice. I am referring to those that made Buhari during the campaigns to promise the electorates some possible impossibilities such as pledging to end Boko Haram within first week in office, making one Naira to exchange for one United States dollar, payment of N5000 each to unemployed youths without taking statistics of the number and many other promises very difficult now to fulfill.
But they will not stop at that. They have also asked the President to completely remove Fuel subsidy (including kerosene used by poor Nigerians), devalue the Naira, sack civil servants by reducing the number Ministries, Departments and Agencies, MDAs. They are led by elder statesman Ahmed Joda, a pro-establishment retired ‘super’ permanent secretary and Bisi Onasanya, Managing Director, First Bank Plc. While Joda and his Transition committee members suggested removal of oil subsidy, Onasanya and his co- bankers want our precious currency, the Naira further devalued. Let me ask: if Naira is devalued, who benefits ? Certainly, the banks; because take it or leave it, all the banks in this country are into round tripping. That is where their profits come from as against funding agriculture and manufacturing. Have you imagined the fact that despite the trouble in our economy with several manufacturing companies closing down and productive activities on the decline, banks are declaring mouth-watering profits in billions and trillions of Naira? What is the source of their profit if not treasury business?
Given the fact that Nigerians voted for Buhari based on his electoral promises anchored on change and not the devaluation of the Naira and removal of oil subsidy, suggestions such as these which if implemented, would cause problem for him, could better be described as policy ambush.
My advice to Mr. President is to be wary of policy dictatorship of some vested interests aimed at undermining his administration. The Naira is already in a free-fall of 18 percent against the dollar in the past year and market operators like Onasanya should not usurp the legitimate functions of the Central Bank of Nigeria, CBN, as the regulator through unhelpful policy dictatorship.
We recall the effect of the withdrawal of fuel subsidy by previous administrations and the socio-economic implications the action had on the economy. Prices of goods and services rose, cost of transportation also rose drastically, even commercial transporters instantly adjusted their fares as soon as the subsidy removal was announced. Many artisans like welders, aluminum window filters, tailors etc, who could not afford power generators are today out of work, many Nigerian youths have taken to riding commercial motorcycle and tricycle while others went into street hawking just to keep body and soul together. The removal also brought about mass poverty to Nigerians as prices of goods and services increased while workers’ income remained constant,
The existing currency devaluation has further eroded wage income of millions of workers (many with unpaid monthly salaries). Devaluation has also increased the cost of domestic production, fueled price inflation and undermined the competitiveness of few surviving industries leading to loss of thousands of jobs.
Should President Buhari take the advice of his soothsayers, consensus is that the action will lead to higher inflation and other related problems. An import- dependent country such as ours, need not devalue its currency because it will not be in her favour. Instead, it will push up cost of doing business and reduce consumer’s purchasing power.
If allowed, it amounts to a sign of government’s insensitivity to the plight of the populace, and will worsen the capacity utilization of industries as well as further encourage dumping of sub-standard products in the country.
Currency devaluation is a sign of leadership which is preoccupied with objectives other than the development of the economy and the society. It also indicates little appreciation of the two abiding characteristics of the economy, namely high import dependence and mono product (oil) primary exports, hence trapping the economy in a vicious circle of devaluation and inflation.
Devaluation is only advantageous in countries that are export-oriented. For example Japan devalued its currency to encourage outsiders to import its products. But I wonder what Nigeria would gain from devaluation, when export proceeds, accounted for less than 2% of our foreign exchange.
Again, it will not only discourage investment but stifle existing companies with average utilization in the manufacturing industry on continuous decline. The weakening of the Valued Added Tax (VAT), and increase in the pump price of petroleum products, among other sundry costs, have contributed to further weakening of the consumer’s purchasing power.
Before now, expectations were that government would reflate the economy and stimulate growth, but this has not been the case.
And since devaluation gives rise to inflation and inflation increases cost of living, Nigerians would have to spend more of their stagnated income, if the new policy scales through.
In addition, currency devaluation would lead to increase in cost of imported inputs and machinery which would increase production costs but reduce competitiveness of our exports.
For the commercial/retail sector, devaluation would lead to increase in prices of imported finished goods and services, through import-parity pricing and demonstration effect. This will increase local product prices thereby making it more difficult for an average Nigerian to afford goods and services. I don’t think our president would wish such hardship for Nigerians.


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