Sliding Naira and the Shame of a Nation

I never in my wildest imagination thought that our dear Naira would ever depreciate to the level we are witnessing in the last few weeks. I had all along been expressing displeasure about the sliding Naira because of the slipshod economic policies of the Buhari administration, but I never envisaged that it would become this bad. About nine months ago when Goodluck Jonathan handed over to Muhammadu Buhari, the Naira was exchanging at about N220/$. Then, many were very angry and cast aspersions on the Jonathan administration for allegedly mismanaging the economy.

Now that the exchange rate has become extremely ridiculous, this set of people who protested against N220/$ are nowhere to be found. Our scruffy currency was yesterday exchanging at N371/$ at the parallel market following continued scarcity of the greenback. How can our dear Naira be exchanging at such an outlandish rate? Our symbol of statehood has never been this badly battered in the 55 years history of this country. We have never had it so bad. Clearly, these are signs of a badly managed economy.

It is a shame that this administration simply sat back and expected our Naira to positively respond to the “body language” of the President. The global standard is for a forward-looking government to come up with hard-headed policies to shore-up the value of its currencies. Such a government must also show by its actions that it is committed to enhancing the value of its currency. The truth be told; there has not been a single pragmatic policy in the last nine months to protect the Naira. All we’ve seen were cosmetic and crude arm-twisting tactics that gave us no result. At a point, the Buhari administration placed all sorts of funny restrictions on the use of domiciliary accounts. This took our Naira nowhere.

Rather than facing the realities of the situation, this administration and its apologists have been spending precious time blaming crumbling crude oil prices and the Jonathan administration for our economic woes. They often forget that almost 40 other oil exporting countries are also affected by falling oil prices. Some of these countries are doing fairly well because of pragmatic fiscal and monetary responses to the falling oil prices. As a result, their currencies are not plummeting as much as the Naira is doing. A government that has spent the last nine months blaming its predecessor surely has no business in power.

The manufacturing sector that would have helped to ease the pressure on the Naira is gasping for breath. Jonathan may not be the best in terms of what this country desires in a president, but during his administration, some of these manufacturers were exporting to other West African countries and earning hard currencies for this nation. Under Jonathan, our manufacturers were happy and industrial capacity utilisation went up substantially. All sorts of stifling policies rolled out in the last nine months have combined to incapacitate this sector. Now, the increase in electricity tariffs and policy somersaults are creating more problems for Nigerian manufacturers. Some of them have closed shop or relocated to other West African countries where production environment is conducive. Many can now understand why the Manufacturers Association of Nigeria and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture faulted all the policies designed by the Buhari administration to stimulate the economy and salvage the Naira.

Some of the actions and inactions of Buhari have left me wondering whether he is genuinely interested in defending the Naira. This government is yet to cut avoidable expenditures with huge foreign exchange components.  By official figures, this administration spent N2.3 billion maintaining the ten aircraft in the Presidential fleet in the last five months of 2015. The bulk of this is in forex. About N5 billion will go into the same aircraft maintenance in 2016. We can’t continue doing this if we are talking about shoring up the value of the Naira. Our globetrotting President and his ministers must also cut their foreign trips to conserve our forex. Our journeying governors must also be checkmated to preserve foreign exchange. Again, why should a government struggling to save the Naira sell forex to pilgrims at concessionary rates? That was what Buhari did last year. Our president has to put aside sentiment and do the needful to save the Naira.
Our CBN has obviously failed in its core mandate of ensuring stability of the Naira. It must start employing rational strategies to prevent further depreciation of this currency.

Virtually all the policies put in place by the CBN to enhance the Naira were cosmetic. This is why we are getting this negative result. This government must allow the exchange rate to be determined by market forces but with some moderation by the CBN. The era of regulated inter-bank rate must come to an end. As suggested by MAN, the Naira should be allowed to float freely within a bracket.  We don’t have adequate reserves to keep holding the naira at the so-called inter-bank rate. Illogical administrative controls and restrictions by the CBN are killing the Naira. This inter-bank rate is simply a paddy paddy arrangement involving government officials, banks and the CBN. If Buhari is genuinely interested in turning around this country, USD from the CBN should be sold at market price, with modulations. With this, forex round-tripping will die a natural death. This is the only way our battered Naira can appreciate.

Again, this administration has always been talking about diversifying the economy to reduce reliance on crude oil as our source of foreign exchange. It has been all talk and no action in the last nine months. It is very sad to note that Buhari lacks any blueprint on this much-talked about diversification. I challenge the president and his men to bring out any such document if it exists. They have simply been showboating. Buhari must get serious about the diversification of our economy. He has to genuinely start looking towards agriculture and solid minerals as sources of forex. He should also look towards gas, particularly the completion of Brass LNG project. He must genuinely encourage indigenous production and exports to enhance the Naira. The government must also implement policies that would stimulate foreign direct investments so as to grow its sources of forex.

Above all, our President must seek advice from competent economists and for once, ignore his legion of sycophants and “eaglet” economic advisers. The truth is that Buhari has to look for another Ngozi Okonjo-Iweala. For four years, this hands-on lady effectively managed the economy of this country and ensured a fairly stable economy and currency. All she got in return was insult from wicked and self-seeking people.

When Was the Customs Moved to the Presidency?
The Comptroller-General of the Nigerian Customs Service, Col. Hameed Ali (Rtd) has been all over town bragging that he reports to President Buhari alone. Ali has turned himself into an Emperor at the Customs, intimidating virtually everybody and turning civil service rules on its head because he has “strong connection” with the president. He thinks he’s bigger than everybody except the president. Many of us will not forget in a hurry his recent spat with the Finance Minister, Kemi Adeosun during the budget defence in the Senate. It was so nauseating listening to the Customs boss telling Adeosun: “I have told you before, I don’t report to you. I report only to the President.” So, is the Customs now an agency in the Presidency? I did some checks in the Presidency and discovered that there was no formal directive to this effect. Ali has simply been taking advantage of his closeness to Buhari. The President should clear this muddle. The Customs boss can’t be bigger than the finance minister. The global standard is for Customs to operate under the finance ministry; ours can’t be an exception. This government should not contemplate placing Customs in the Presidency. Buhari should perish this thought. Again, Ali should sit down and do his job properly instead of bragging around with the name of the president. The revenue from the Customs is still unimpressive. There is still a disconnect between Customs revenue and imports. Our dear feverish Ali must avoid actions and utterances capable of jeopardising his mandate.

That Prickly Amnesty Office Status Report
I have spent quality time going through the 2015 Status Report of the Presidential Amnesty Programme recently submitted to the Senate Committees on the Niger Delta and Public Procurement. Some of the 2015 expenditures were clearly not in the interest of the troubled ex-militants. The issue is not about the contracts passing through tenders’ board and complying with due process. The truth is that some of the expenditures were simply preposterous. For example, I can’t understand why the Special Adviser to the President on the Niger Delta and Coordinator, Presidential Amnesty Programme, Brigadier-General Paul Boroh (rtd) is justifying the purchase of an armoured Lexus for N55 million amidst so much financial crisis in the Amnesty office. This Lexus is clearly for Boro’s comfort. It is very sad to note that the Amnesty Office spent over N157 million on cars within five months of 2015 - One Toyota Land Cruiser at N25.85 million; four Toyota Camry and four Toyota Hilux 4WD at N75.35 million. The N510 million paid to Westerfield College by the Amnesty Office to prepare 150 Amnesty students for one-year advanced level programme was also outrageous. This is about N3.4 million per student. There is also the need to review the huge forex being spent on students in foreign universities by the Amnesty office. The N10.4 billion expended on tuition fees, in-training-allowances, accommodation and books for students offshore and onshore last year is frightening. I am very sure that the students sent abroad got the bulk of this N10.4 billion. Boro should patronise Nigerian universities and save our dear country this huge forex outflow. The exception should be for courses not available in Nigeria.

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