The current economic recession has generated diverse interest and comments from the clergy, economists, business circle, lawmakers, and even from common men on the streets. Some comments are patriotic and genuine, while some are not rational. To the clergy, the dwindling church collections – tithes and offerings are the fault of Godwin Emefiele. Some lawmakers without any scientific deduction linked the recession to the CBN’s supposed unarticulated policies and ineptitude of its helmsman.
Recently, there were some pockets of sponsored protest against the CBN, accusing its governor of causing economy recession. He was said to be responsible for their inability to pay their children’s school fees, why they were owed salaries and cannot even access medical facilities, due to high rate of exchange of the Naira to the Dollar. Some of the placards read: Emefiele: Where is Your Conscience?’ ‘$1 – N500: Sack Emefiele’, ‘Anti-Christ in CBN House’. From the placards and ranting of the crowd, I wondered why Emefiele was singled out for crucifixion.
Before the obviously sponsored protest, there had been clamour from the Manufacturers’ Association of Nigeria (MAN) and some faceless trader/businessmen asking the President, Muhammadu Buhari to show Emefiele the door. Among those vociferous about this campaign is the Chairman, Erisco Foods Limited, Chief Eric Umeofia. An astute businessman I have always admired for his patriotic fervor, in heeding the call to produce and patronize commodities we have comparative advantage in order to develop the economy. He started with packaging imported tomato paste, which of course provided jobs for Nigerians; a feat the government is hardly impressed. However, he recently threatened to close down his factory if his need for $50million was not met by the CBN. He rallied around himself other indigenous manufacturers, the so-called traders, spending huge amount of money and spreading malicious campaigns against the/ Bank in newspaper advertisements, press conferences and sponsored radio/television programmes, accusing the Bank of sabotaging the federal government programmes on economic diversification.
I was not keen in commenting on the challenges in the FOREX exchange market for obvious reason, Nigeria do not print dollar, neither do the country has favourable balance of trade to warrant seamless inflow of dollar, but only dependent on proceeds from crude oil that has suffered downward spiral in the world market and sharp fall in product supply due to vandalism in the Niger Delta region of the country. However, when Chief Umeofia appeared recently on a programme on AIT – ‘the Morning Ride Show’, accusing the CBN of skewed allocation of FOREX in favour of some unnamed Indians and other foreign nationals, the urge to contribute to the debate overwhelmed me. He accused the current CBN management of running an ‘economic abracadabra’, wondered why the Bank should be working against his interest to help Nigerians. He said this as if his financial interest was not his preoccupation. The Erisco helmsman must be commended for relocating his business from Angola and United Arab Emirate to Nigeria to assist in growing the economy and create jobs, but it must be noted that it is not only Erisco Foods Limited that the CBN should open its FOREX vault to. Until he embarked on destructive pull-him-down campaign against the CBN, and its management, Dangote Group is also into tomato paste production and never held the nation to ransom or threatened to shut down its factory for lack of access to FOREX.
In some newspaper publications, the CBN’s reaction to Chief Umeofia’s public ranting claimed that Erisco Foods Limited had received significant support from its Commercial Agriculture Credit Scheme (CACS) as far as above the stipulated N2billion threshold is concerned to support its claim to embark on backward integration, by engaging in primary production. Till date, Erisco cannot fully claim to have complied with what he promised, rather, what he does was packaging tomato concentrates. He is not the only tomato paste businessman in Nigeria, but because he lacked basic understanding of the economics of foreign exchange earnings and the management of foreign reserves; he has ended up de-marketing others, just because of his greed to have the lion share of the FOREX window. The question Nigerians should ask Umeofia is – what did he do with the credit given to him. Though he claimed the money was not enough for him, but is he the only entrepreneur with absolute access to the CBN vault? Nigerians are waiting for his explanation.
On an AIT programme of 12th October, 2016 when responding to a question by the anchor person on what actually he wants from the CBN, he told the presenter that “I am not a university graduate to articulate my demands, but as a ‘practical graduate’, people called me controversial because I refused to let them deceive Nigerians”. He claimed to have better understanding and experience on how to turn the economy around than those saddled with it, just as he did outside Nigeria. He does not want anyone to deceive him into investing big in an economy that favours foreigners. This show how uncultivated his mind is.
He also accused the NAFDAC and the Minister of Trade and Industry of sabotaging the government economic diversification drive and urged the President to investigate and overhaul the institutions. Everyone, including Umeofia knew the country was headed this way due to lack of proper planning and inability to save for the rainy day. The country would not have recessed into the present sorry state if past administrations had instituted enduring structures that would have acted as buffer at times like this. With my knowledge of elementary economics, I have never seen a country grow economically without structures that stimulates production; neither is any nation totally independent of others. If Umeofia must know, this is outside the mandate of the CBN. However, I pardon his inadequacy.
Another question Nigerians should ask the ‘practical graduate’ is: does the CBN print dollars? The apex bank is only the nation’s banker which keeps what comes in for the government, and since the revenue from the product has dwindled to meet the needs of everyone, including the government in executing its programmes, Umeofia should be reasonable enough to rein-in his greed and destructive campaign to pull the CBN governor, and the institution down.
As desirable of Umeofia of a Nigeria that is self-sustaining so is Emefiele. He started as far back as 2014, when he warned the nation of the impending doom, but no one heeded to his warning. When he suspended the 41 items from the inter-bank FOREX window, hell was let loose. People called for his head, but people like Umeofia applauded the policy. He sang praises of the governor to high-heavens, but today Emefiele is the villain, just because the nation’s situation has become so precarious and the little inflow of FOREX must be judiciously allocated to the most urgent needs of Nigerians, as against the whims of a single greedy man.
Moreover, the ‘practical graduate’ must understand that the CBN does not allocate FOREX anymore to individuals. That responsibility is with the deposit money banks that bid for FOREX and get what is available according to the priority of the request to the interest of the nation. We may perhaps ask: What is the relationship between Erisco Foods Limited and its bankers, considering the claim that he had applied for $50million for the past 7-8 months and yet could not access FOREX from his bankers.
How come that the same Emefiele, whom Umeofia praised to the high heavens sometime in May 2016 become the one responsible for currency speculation and round tripping? If Erisco Foods had used the facility it got from the CBN for what it was intended, he would probably today be boasting and be acknowledged as people talk of the Dangote Group for creating jobs for the teeming youths. The CBN under its current management has done more than their predecessors in office despite the economic challenges. They have confronted the economy with forward looking policies and interventions, mostly in critical sectors of the economic in order to galvanize the economy.
The CBN governor has not left any stone unturned in supporting government to ensure successful implementation of its policies and programmes. The CBN real sector initiatives, such as, the N220billion Micro, Small and Medium Enterprises Development Fund (MSMEDF), the N200billion Commercial Agriculture Credit Scheme (CACS), Agricultural Credit Guarantee Scheme Fund (ACGSF), Nigeria Electricity Market Stabilization (NEMSF), Power and Aviation Intervention Fund (PAIF), YEDP, Anchor Borrowers Programme and most recently, NIRSAL to mention few. So, what has Emefiele done to warrant the ‘sack him’ campaign by Chief Umeofia or what should he have done better?
In as much as I sympathize with Erisco Foods Limited and other businesses in similar FOREX quagmire, however, the lesson remain for our local manufacturers to source their raw materials locally in order to achieve backward integration with local agricultural products. This is the only way to help conserve the scarce foreign exchange resource and at the same time ensure optimum employment of domestic labour and other resources. The lies being peddled by likes of Erisco Foods who claim to be indigenous, but feeding fat on scarce FOREX earnings (official and the parallel) to engage in round-tripping activities negates the opportunity given to them by the Bank. He should not turn around to spite his benefactor because of his selfishness and greed.
Threatening to close down and sack his staff if the government fails amounts to hand twisting the CBN to give him FOREX. This smacks of a frustrated man, who probably is having financial challenge. Indeed, if Nigeria is no longer conducive for Umeofia to do business, he is free to relocate, while the patriotic and genuine ones would stay. Empty barrel they say makes the loudest noise. Umeofia should borrow a leaf from his brothers in the eastern part of the country, Innoson Motors, who recently got the support of the Chinese to invest $1million in his business. He did not call the Minister of Trade and Industry or Emefiele names because of scarcity of FOREX, but went offshore to seek partnership to grow his business.
But if I may finally ask – does Umeofia wants us to break the FOREX till for him just because he wants to produce tomato paste?
James Uzezi wrote in from Vom, Plateau State
