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.
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.