Thursday, 23rd March 2023
Breaking News:

Infrastructure for corruption: Trouble!

By Kola Omotoso
05 June 2016   |   2:34 am
It is easy for anyone hearing that Nigeria is now fighting Corruption tooth and nail to laugh and ask which corruption are the Nigerians fighting?


It is easy for anyone hearing that Nigeria is now fighting Corruption tooth and nail to laugh and ask which corruption are the Nigerians fighting? Are they making joke, or fun-fooling? How can a place that makes a virtue of turning into a permanent instrument what other countries use as emergency tools talk of fighting Corruption?

Anywhere in the world the use of generators is for emergency relief. There has been a storm and the electrical infrastructure has been damaged, you could bring in a few generators to provide electricity until the main structures damaged are repaired and everything is restored. Not in Nigeria. The generator has become a permanent feature of the Nigerian power provision environment. Both state and federal governments now budget for generators. And generators have also generated (!) their own culture and vocabulary. There are “I better pass my neighbor” generators. There are oga generators and there are omo-odo generators. There are generators that dare not be turned on when the big man generators come into their own.

It ought to be clear to the leadership of the country that generators, of whatever description, in their thousands and in their millions, cannot amount to the power that is needed to grow development and power the economy that a country like Nigeria needs. It ought to be clear to all of us that as long as we provide for generators in the budgets of the country we would not provide for the proper provision of power generating infrastructure for the country. It means that someone who is fighting Corruption in the country would ban the importation of generators and concentrate on proper infrastructure to power the nation. Fighting Corruption with generators is like lighting a football match with a candle.

What would be the effect of the banning of the importation on the country? There would be smuggling of the product into the country. And instead of crowding the ports with generators, we would have the borders of country covered in smuggled generators. And that would not be a good thing for the ports. So, instead of banning the importation of generators into the country why not decree that generators be manufactured in Nigeria? Why not decree that only generators made in the country could be used in the country? Where would the power form the factories to make the generators come from? Maybe import generators for some time to power the factories to manufacture the home made generators and when enough have been made, then, we would then use home generators to make more home-made generators. Sounds like we a fun fooling? Yes we are. Only a total ban of the importation of generators can begin the wisdom of providing power for the country. Importation of generators is an aspect of the infrastructure for corruption. It needs to be demolished.

The next major infrastructure of Corruption is the Dual Foreign Exchange Policy of the Central Bank of Nigeria. Serious economies shocked into trouble by a particular economic crisis would use the instrument of dual or multiple exchange mechanism to correct the exchange relationship of the national currency with the major currencies of its trading partners. The shock system is used for a month or so, used for a maximum of three months and thereafter the exchange system is returned to the single system that is the normal in all economies that are rational and not built to help thieves.

A dual exchange rate permits the central bank to have a fixed rate of exchange with the national currency as well as a floating rate outside of this fixed rate. Essential items, which are really koseemani, sine qua non, without which some things cannot be done in the country, are made available at the fixed rate. Special importers are fitted out with the fixed rate and, thus advantaged, they can make things needed happen for the country. All other frivolous imports of luxury items such as toothpicks and plastic bags can be imported using the floating exchange rate. Sounds like I am making joke? Yes, I am making joke.

What happens between the fixed rate of the Central Bank and the floating rate of the dual carriage way is what happens on our dualised carriage ways. We travel up and down both in both directions and in different directions. The difference is that the journey that starts at the fixed rate as a millionaire ends at the floating rate as a billionaire lairu-laiso without moving a muscle in labour. If ever there was wealth without labour, one of Gandhi’s modern seven sins, it is this double-dealing of this dual system of exchange rate. Someone who says he wants to fight Corruption would have begun by stop the system. Not to bring this emergency system that has existed for decades to an end is to stoke the fire of Corruption with renewed energy.

It is ridiculously funny for President Muhammadu Buhari to tell us that he is under pressure to devalue the naira. Please, can an economist tell President Buhari that the dual exchange rate system devalues the naira everyday and does not need his help, thank you much Mr. President, do not agonise, naira devaluation is taken care of as part of the dual exchange rate system. Find something else to agonise about.

What would be the effect of unifying the exchange rate in the country? The unemployment figure in the country will be balloon. What work would the errand boys of the bureaux de change do when there is no longer a dualisation of the exchange rate? It is impossible to say right now. How many such offices of exchange exist in the country? How many people are involved working each of these offices? What skills are needed for working in the offices, which skills can now be re-deployed in another part of the economy?

The dual exchange rate is the master plan of Corruption in Nigeria. Anyone who says otherwise should tell Nigerians what is the use of this exchange rate system? Who else does it benefit except the usual suspects, awon arije nidi idaru, those beneficiaries of the chaos that is the Nigerian infrastructure of Corruption?