Emefiele and the economics of the Naira free fall

By Udo NTUDO

LAGOS-EVER since the  naira entered into a tail-spin, performing woefully against other currencies, there has been an outpouring of concern by disillusioned citizens. Perhaps because of the high prevalence of poison in contemporary politics in the country, all manner of suggestions  have been made.

Naira

Naira

One of such  suggestions  that have not only heightened exasperation among  the informed but  also exposed the  degree of ignorance of their proponents  is  the tendency to blame the Governor of the Central Bank  of Nigeria (CBN), Mr Godwin Emefiele  for the  fate of  the naira. This argument is not only hare-brained but reflective of the tear-jerking ignorance that inspires its protagonists.

For starters, elementary economics tells us that the value of any currency  is determined by a predictable composite, one of the most critical of which is the aggregate contribution of economic production to the gross domestic product of  the  economy. For a mono-product economy like Nigeria’s, which depends almost solely on  oil,  this scenario, in itself, is well-defined for economic disaster which is exactly what is playing out.

Rather than waste  energy in dramatizing ignorance of basic economic  principles, protagonists of trending politics, that is dripping with poison and vendetta, should concern themselves with questions like, why  has it  remained convenient for the FG to continue to grant import waivers for items as basic and ridiculous as tooth picks and  bottled water  among others that profile the vanity of a lazy middle class? Rather than review the quantum of rudderless economic policies, which precipitated the exodus of manufacturing companies from  Nigeria to neighbouring countries, the  apostles of the trending politics of poison and vendetta seem determined to tackle the same person who has been battling  to manage the consequences of  the  riotous politicking by  government.

Like, former Akwa Ibom State governor and  the Senate Minority Leader, Chief Godswill Akpabio,  who is yet to be credited with the genius of designing the socio-economic renaissance of that state with his revolutionary free and compulsory education programme because of the trending politics of vendetta, Emefiele has  been suggested for needless sacrifice , perhaps to whet the enormous capacity for mischief by these hidden persuaders who appear bent on derailing the change proposition by Presdient Muhammadu Buhari. Suddenly, it is so politically convenient to ignore the tested economic fact that any country, which does not produce any thing, has no reason to be alarmed if its currency  inevitably slides into danger as the naira is currently doing.

Besides operating an economy which is insatiable in terms of capacity to absorb  every junk brought from abroad, a  sufficient reason to kill the naira, the ill-advised resolve by the  principal actors in this government to disparage the immediate political dispensation has, ironically,  the  combined with other factors to intensify international dismay with and suspicion for the country’s economy.

Did the managers of the  rowdy orchestra of anti-corruption  expect international confidence in the country’s economy after key actors, including the president, have repeatedly rendered   uncomplimentary testimonies against the economy? Even if the naira  had maintained  a semblance of stability, how could we have expected a non-producing economy to behave other than reflect its true economic worth? For God’s sake, Emefiele should not be made a scapegoat in a political conspiracy that he had no hand in.

Every nation’s currency is a reflection of certain basic economic composites, especially sectoral contribution to the Gross Domestic Product (GDP). It is like a system where a unit can not run faster than the whole. Because the rest of the country was in a hurry to rape the ‘conquered’ territory of Biafra and outlying regions, every one abandoned what they knew best how to do to bring food to the table and now that the oil bubble has burst, the hilarity in this foolishness has suddenly become dramatic, with most state governments unable to pay workers salaries.

Only diversification of the economy can save Nigeria. Those clamouring for the removal of Emefiele as CBN Governor because of the free-fall of the Nigeria are victims of spectacular ignorance. The dynamics to achieve a stable and strong currency, unfortunately, can not be fabricated even in the laboratory of poisoned politics. The naira is a reflection of our true worth as a nation.

*Ntudo is a Lagos based public affairs  analyst.

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