Numerous narratives and buck passing predating the official pronouncement of the economy entering recession have been so entertaining, warped and quite unrealistic. Commentaries by captains of industry and financial cum economic technocrats blaming the CBN and the current administration of President Muhammadu Buhari for the current economic downturn have not only been parochial, sentimental but quite misinforming. It is rather worrisome that the elite class, who should know better about how we got into this quagmire instead of enlisting the support of the fiscal and monetary authorities in revamping the already comatose economy, has disappointedly engaged in damaging campaigns against the managers of the economy, particularly the CBN.
Interestingly, to a very large extent, many of these critics are culpable for the present economic ruins. They are the economic predators who failed to do what is needed to be done when the opportunity called for it
The descent into recession did not start now. It predated the current helmsman at the CBN and the present Federal administration. It should be remembered that the CBN governor first sounded the alarm as far back as November 2014 that if drastic action was not taken the economic may head for recession. And the Bank in its wisdom suspended some 41 items from the interbank FOREX window, but rather than appreciate the measures put in place to forestall the doomsday, were opprobrium and aspersions were cast on the Bank. There can be no pain without gain, and the only permanent thing in life is change. Unfortunately, Nigerians are averse to change and we cannot continue threading this way. The suffering of today is not peculiar to the vociferous elite, but to every Nigerian, particularly the masses who were never part of the scheme that got us to the present scenario, nor were they taken care of or considered important by past managers of the affairs of the country.
But how did we get to this precarious state? Going back in history, there was a period when Nigeria depended only on revenue from agriculture for survival. I am talking about the 50s and 60s, but with the discovery of oil; the sector was abandoned rather than built on the comparative advantage inherent in the sector to add value by way of light processing industries to improve terms of trade of theses commodities’ exports. The fast money from oil and the mismanagement of the gains from it has brought us to this economic stalemate. We are now stranded just because we failed to translate the agricultural endowment into light industrial hub capable of supplying the entire West Africa. Past administrations paid lip service to economic diversification when the signs were obvious that the oil may have actually become a challenge rather than a blessing, but we did nothing. We equally failed to save for the rainy day.
The question is, should the CBN be blamed or held responsible for the economic woes? Like everyone won’t to say, we cannot absolve previous administrations and managers of the economy from the blame of the present predicaments of the nation. It is left to be desired, what they did when the country started drifting to this present state. Importation of foreign goods where we have abundant local capacity to produce assumed a crescendo that constituted a huge drain on the reserves and consequently put the Naira under undue pressure. At a time until the second quarter of 2014 when the price of crude oil started to fall, world crude oil price was around $110 and by May 2015 it had crashed to around $50, and by the third quarter of same year, it fell to its lowest at $30, yet the huge appetite of Nigerians for foreign goods did not abate. Currency speculators with their foreign cohorts did not relent in subverting every step of the CBN to curb their criminal activities.
The local currency exchange rate to the US$ was twice adjusted as the monetary authority could not continue to defend the Naira as the reserves was getting unbearably depleted. The attacks on pipeline installations by the Niger Delta militants was also a major cause that affected the revenue the government expected from the sector, not to mention the rascally Boko Haram insurgents. It thus became an uphill task managing and sustaining the economic growth with all these distractions.
The credit balance left in the national reserves by the immediate past regime was more than the debts owed dubious oil marketers, aside other government commitments. The current recession is a cumulative effect of economic mismanagement over the years. Past regimes failed to take advantage of the high oil price boom to build required infrastructure in order to grow the economy. It was an era of unbridled daylight looting of the treasury.
Instead of the fruitless effort to locate the blame on any particular entity, Nigerians should own up to our culpability in the whole scenario. We were never satisfied with nor appreciate anything produced locally; it must be foreign. Our children must go to school abroad. It must be foreign rice on our dining tables; it must be foreign clothing materials we must wear to parties, and so on. This warped taste for foreign goods added more pressure on the Naira and affected the economy. it was to moderate our excessive taste for foreign products that the CBN suspended funding the importation of rice and other 40 items from the interbank FOREX window to enhance the capacity of local farmers, to create jobs and grow the economy. That action was not welcomed. The economic saboteurs – local and foreign, took up arms with the CBN. While the real managers of the economies including the CBN are laboriously pursuing developmental goals and building institutions in the country, economic rascals are busy pursuing selfish interest. The TSA policy of the government has equally been serially attacked as one of the reason why the economy entered recession. The recently instituted flexible FOREX regime has suffered the same fate. Gladly however, in the last two months of its introduction, the policy has attracted investments worth $1billion into the economy.
Most critical at this juncture is the needed synergy between the fiscal and monetary authorities to turn the economy around. The signs of early recovery are quite visible. What we must do is to spend our way out of the situation which I believe the government should do. So, it has been proven that the CBN efforts are beginning to yield visible results. The Anchor Borrowers’ Programme is one of the best policies ever initiated by the CBN. The importation bill on rice has drastically reduced and local production boosted. The intervention in power sector has brought significant improvement in power supply and with the renewed support from international community, Nigeria may sooner than expected to come out strong if we as the citizens do our own bit – ‘Love Nigeria, eat Nigeria, and buy things produce in Nigeria’. We cannot continue to develop other economies and destroys ours.
Nigerians must remember the good counsel of the IMF Managing Director, Christine Largade when she visited Nigeria early this year, she pointedly told us that no one other than we, Nigerians, can help ourselves out of the economic woes. We have the resources and the capacity, what is lacking is patriotism – politically and economically. This is not the time for blame game or buck passing, it is a time for everyone to come on board and help salvage the situation. If we patronize goods produce at home, we would be helping the Naira, grow the reserves, create employment and wealth. The Niger Delta militants should realize that destroying the national heritage and bombing the pipelines will not solve the problem of degradation and neglect the region had suffered over years, rather it is compounding the problem. Dialogue and negotiation at the roundtable and stoppage of the destruction at the creeks is desirable. More so that, the region, has the local and global support for their plight and the need to clean up the region for economic activities to take place.
Though some self-acclaimed economists have labeled the CBN as incapable to handle the economy, but if I may ask – was it the currently constituted CBN management that is responsible for the current economic problem? Ever since its current governor came on board, he came with a clear vision and mission outlined in his maiden media briefing and ever since then he has not relented in pursuing his developmental programmes which is what has got him into collision with economic predators who had been feeding fat on the economy.
Nigeria’s situation is even better than other economies in the same situation as ours. We have the resources and the human capacity. Nigeria is abundantly endowed with huge oil/gas deposit, solid mineral resources and vast arable land that are lying fallow but suitable for agricultural activities. It is equally advantageous given its long coastal area spanning from Lagos Beach to Calabar coastal area in the Atlantic Ocean. What is lacking is economic patriotism and change of taste and attitude to appreciate what is Nigerian. The economic technocrats and bureaucrats should come forward with realistic solutions to the problems, join hands with the Bank and the government and stop playing to the gallery on the pages of newspapers and television tubes. The campaign to ‘pull him down’ at all cost would not work, but ‘jaw jawing’ with the CBN and other critical agents of government will get us out of the problem to the surprise of those who wants nothing good of Nigeria. God bless Nigeria.
Alonge Kayode is of The Polytechnic, Ibadan
