Many of us have congratulated Professor Soludo on the stability of the naira which had been on a free fall until he skillfully applied his economic brake. If that stability was good for the naira, this falling trend cannot be good now. In fairness to him, he attempted to peg one hundred naira to a US dollar but was overruled by powers above him.
We could have capitalized the temporary stability of the naira on basic infrastructure needs. Oh yes, we could have and could have but for inconsistent government policies: Jakande’s 1981waste to power and Lagos underground transit.
The Professor is now saying that the fall in naira is a true reflection of foreign exchange market fundamentals and something has to give: either our foreign reserve or a weak naira. While some of us would argue that our basic economic fundamentals remain the same, too dependent on foreign markets, Soludo thinks his liberalization of the naira put us in good stead today.
This writer, may be out of ignorance, had wondered if his liberal US dollar was sustainable, though many of us praised him especially on the equalization of dollar exchange with parallel market.
Simply put. If you flood the market with foreign money because it is coming from somebody’s backyard for every Adio and Bimbo to spend it anyway they see fit, we have to ask if what we put into making British pound or US dollars is worth what we are buying. So this writer decides to buy candy and electronics with his dollars but there is no electricity to enjoy the electronics and the candy turns him into fat-so, is that worth it? It’s like monkey dey work, baboon dey chop.
Well, some of us ordinary folks just do not understand. But Nigeria cannot manufacture US dollars and we do not earn a great deal of it either. Our main source of US dollars is crude oil and we spend some of it importing refined oil at a higher world price. It is beginning to sound like the case of a fool and his money will soon part.
So if Nigeria do not breed or earn enough US dollars, for how long can we liberalize US dollars to flood the market before we run short?
We can talk about liberalizing cassava that can be grown in abundant quantity in my village if I decide to or encouraged to farm. Even that, we cannot do with all the incentives and regulations about certain quantity in bread put into place to spur demand, farmers cannot get it into local markets. We have to import disgruntled Zimbabweans to help us grow it in Kwara and Chinese to buy it raw. That is a product grown in Nigeria, not dollars printed in a foreign country.
Professor Soludo can counter and claim that while he held the horses tight, someone else should have taken the advantage and “put into productive use” the most essential needs of the Country. We all know that our leaders do not think about the Country first, they think about their own convenience first.
We are Nigerians, we know Nigerians and our environment better than any theory that has worked elsewhere. So we must develop our policy anticipating how Nigerians are going to react, not how well it worked in other environment.
Freedom to spend our money the way we want also has a price. Part of it is a responsibility to make sure the money is ours, not looted and our freedom to spend does not curtail the freedom of others to survive. If most Nigerians are in need of electricity as a priority to foster business and industries that will provide jobs which in turn will enhance spending power, personal electronics must not override the basic needs in disguise for democracy.
There is always a silver lining. This is the time Nigerians in Diaspora can send money home to start that small business or finish that abandoned house that has been idle for a while. Even then, prices hardly subside in Nigeria, so there is always a reason to send more money to relatives who just want the opportunity to get healthy meals and school fees. If there is a chance to send much more, daddies or brothers may take a second wife.
Others are now claiming that we have more naira to spend now since our crude oil is sold in US dollars. This is very true but we do not use naira to develop our basic infrastructure at home and create employment for our people. Our foreign demands increase manufactured goods from outside the Country and create jobs for them.
Most countries are going back to repair and build their infrastructures, retool their assembly plants and create green jobs in preparation for the next century. But Nigeria hoards its given talents in foreign reserve for better use by outsiders.
From Nigeria point of view, a weak naira buys very little foreign exchange used to purchase most of our goods and even some services from abroad. The reason we spend so much of our income on foreign products is a different topic altogether but that is reality right now. In short, we have to work harder to make or loot more naira to satisfy our craving for anything foreign.
Usually a weak naira could have been a blessing for a manufacturing exporting country which we are not. So if we hear about China manipulating its currency so that its goods can be cheap and competitive to outsiders, we understand why. In Nigeria lack of fundamentals shut down businesses like Dunlop, Michelin Tires, and car assembly plants loose business to foreign models.
The obvious reason is lack of electricity which most manufacturers, no matter how small need. But the less transparent or not so easy to admit reason is our flavor for foreign goods that kills local industries. Every official business by our politicians includes foreign travel to observe and study how we can govern ourselves like the countries we love to visit.
Soldiers learn politics to overthrow government. The private business people also have to travel to purchase our demands. Since there so much hard currency circulates, they demand British pound or US dollar payment.
So the economic rule is to have about six months foreign reserve “idle capital waiting to be put into productive use” outside the Country to satisfy these lavish demands by civilized Nigerians while majority of the poor ones would be glad to get local rice, gari, corn, beans, fish and meat one or two times a day. Enough gari at home used to be our last resort. The products imported are beyond most Nigerians’ taste and means. They are not neither suya nor isiewu with palmy.
We have been waiting to put that idle capital into productive use for so long, some of us will not be surprised to hear that it has been stolen. Maybe not, we may lose it in stock market. Oh no, we have been assured that our foreign reserve have been invested in safe portfolios.
If all the money is invested in US, we lost out when British pounds was up against US dollars. Moreover, US is one of the biggest debtors in the world and will be running about a trillion deficit, what are we going to do if we cannot take our money out when needed, or if for some reason it is frozen?
In short, we are blowing our foreign exchange on tooth-picks for the wealthy in the name of the Nigerian people. As long as these expensive goods are in demand, we will find a way to bring them in. Some Nigerians know how to take care of themselves and avoid the inconveniences at home.
No light? No problem there is individual generator. No water? No problem, there is people’s drink (champagne). No roads? No problem, there is sport utility vehicle that can negotiate the rugged road. And if there is no road at all, there is helicopter service that can take you from the airport to your home.
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Laura from USA Oswego IL, USA January 19, 2009
Hello! My stupid ex-husband got scammed by some unscrupulous Nigerians and I am wondering....about how much is $12,000 US dollars in Nigerian money? What can $12,000 US buy in Nigeria?
My ex is the dumbest donkey in the universe and I would not care so much except that his children are having to eat food donated to the food pantry because he cannot help support them....because he is an idiot and sent all this money to Nigeria, thinking some gorgeous supermodel was going to come to the US and be with him. (Of course, that "lady" is really some guys in a cubicle office with access to computers and a lot of time on their hands to hook into lonely stupid Americans!)
So my question is serious. Just what can $12,000 US buy in Nigeria? A house? A mansion? A castle? I am guessing $12000 dollars is a lot of money in your country. I cannot find accurate information on the monetary exchange rate between my country and yours.
Thank you in advance for your reply.
OMOTAYO, J. A. Lagos, NIGERIA December 11, 2008
On many occasions, I have written online that Mr. Soludo's consolidation was an attempt at "make-fit" solution to our economic problem. As such, it was not going to last.
I wrote and forwarded in July 2007 a 22 page typed document to him and copied Mrs. Okonjo-Iweala, Presidential Research and Communications Unit, President Nigeria Labour Congress, among others.
I have written a series of articles on the basis of the "Consolidation Theory". I have proved many times that the solution for which Mr. Soludo had been given accolades had been used many times between 1991 and 2006 with every attempt resulting in failure.
But I remain resolute like Mr Roger Boisjoly who opposed the launch of the Challenger Space Shuttle in America even when NASA officials and the Management of Morton Tioskol insisted that it was safe to do so. In the end, only the lone ranger Mr. Roger Boisjoly was right. The Challenger was lost 73 seconds after take off. The seven Astronauts in the fligt were also lost.
Today, I am being proved right. Must we weep over the falling Naira? Must we change from our foolishness and imperviousness to strange ideas like the one I have often epitomised? The choice is definitely ours.
God bless Nigeria.
General Samyoung Onwuzulike Washington, DC, USA December 10, 2008
Beloved Nigerians, The Falling of Naira may be a little thing compare to on coming in the World.
I have fear that a great Global Shake Up is at hand. Many heads of Governments, Churches, Muslims and Religious faith Groups world wide will be shake .
Big Cooprate bodies will go because their covering has been removed. The World with their Gods and Allah are like Robbers and Thieves who were caught by the owners.
Mother Christ whom The World and Gods and Allah drove into Wilderness is coming back with Her Angels.
Therefore cry not today is better.
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