Our destiny in our hands
ECONOMICS was always one subject that had a great crush on me in my secondary school and later the university. Economics is ruled largely by laws but an interesting aspect of it is that these laws are themselves subject to an overbearing condition called Ceteri Paribus meaning all things being equal. The intrigues of Ceteri Paribus are indeed a mystery because often times, all things are never truly equal but made to look so. It is unlike Mathematics or the sciences where the answers are predictable and precise. It is a trait that somehow presents economic predictions as not infallible.
In the eighties in my first year at the University of Lagos in a large hall theatre with economics lecture being delivered by a very distinguished professor of economics, I had posed a question: “What happens when a country refuses to pay its debts?’’ The question which was relevant at that time (when the country’s debt profile was just beginning to pile up) is still relevant to this day when the heaps of debts have piled up so much to a high mountain that the country’s shoulders are now dropping.
The class went silent as the lecturer navigated his way out being a question he had not expected. He tarried a while before he answered: ‘‘nothing, absolutely nothing will happen except that no country would want to lose its credibility.” There are likely going to be varied responses to this answer as it would be to figure out the true shape of amoeba. The debt situation is much worse now and would have kept piling if Nigeria were to yield to international pressure to devalue the naira further. It is reassuring that the present government of Muhammadu Buhari, known for fiscal discipline, has said outright no to further devaluation of the naira.
Economic measures have always ended up taking more from Nigerians than the succor they were meant to bring and even at the best of times, Nigerians have never truly felt the benefit of the nation’s prosperity and have never had their fair share of the common wealth. Except perhaps for fuel subsidy! The same cannot be said of economic thieves and treasury looters who are the bane of our underdevelopment.
Economic measures are oftentimes reactions to gross mismanagement of the economy, but for some wicked and corrupt administrations, we would not get to this point. After running the economy aground, Alhaji Shehu Shagri in the eighties imposed austerity measures. Former military President Ibrahim Babangida dribbled Nigerians into accepting Structural Adjustment Programme (SAP) and set off a regime of unending devaluation of the country’s currency. The 16 year period of civilian administration led by the People’s Democratic Party (PDP) under different dispensations was corrupt, wasteful to the extreme and in fact profligate, borrowed excessively with little to show for it and made the naira to nosedive progressively in value.
Why is it that the western powers and the U.S whenever they have economic recessions do not have to swallow the bitter pill of devaluation as a way out? After all, even the Almighty America found itself very broke at the end of the Bush presidency in 2008 that it took a very determined Barrack Obama bail – out programme to rev their industrial machines back to restore the country back to the path of progress. Several other countries in Europe have at various times had slumps but have never had to devalue their currencies to the level they want the naira to be, not even Greece.
What have been the gains of the progressive devaluation of the naira over the years? We have had finance ministers who were bred and nurtured in the best foreign Ivy League schools, took up top positions in the financial institutions and applied these palliatives wholesale to our economy without much to show for it but rather, the country is worse for it. All these show that the solution to our economic travails does not lie outside but within the country. If we must ape any economic model at all, it should be the Asian Tigers: Singapore, Malaysia, South Korea or South American giant like Brazil. Western powers would always take more from us than they are prepared to give us.
How often do we ask why it is so difficult for these western powers in this era of globalisation to repatriate the looted funds from Africa notably Nigeria that have been stashed in the vaults of their banks for decades? They come up with excuses and new conditions for the benefactor countries to meet each time they are getting closer to access the funds. Meanwhile, these funds stolen from Nigeria and other parts of Africa are being invested at cut throat interest rates and greasing their wheels of development.
Devaluation impoverishes and worsens the plight of the Nigerian and makes him or her poorer in relation to the citizens in the rest of the world. In plain terms, the take home pay of the average person is shrunk; he pays more for prices of goods and services. Not only that, he pays more for any goods he is importing into the country, which is a vicious cycle.
The point is to develop the country’s export base and diversify the economy through revolutionised, purpose-driven agriculture and intense development of our mineral resources, which abound. It offers a very lazy model to depend solely on oil. Every inch of the country’s land is so blessed that all it takes is to harness these earth’s resources. Although the country is broke as the president confessed, with prudent management and some creativity, more wealth can still be created and the country would not have to devalue its currency any further.
The country can navigate its way out of the present challenges. Nigeria is a very attractive country with rich natural resources, resilient people imbued with can-do indomitable spirit of never giving up. A potential lender that insists on our devaluation is a bad friend and not needed. We have a ready market for goods and services and cheap labour. Very few countries have these God-given attributes. If we put our acts right, Nigeria will always attract genuine investments.
• Ojenagbon, an estate surveyor &valuer, lives in Lagos.