February 03, 2024

The economy is wobbling, and the govt is fumbling - Ugoji Egbujo

While the naira gasped for breath, the nation sent 400 tourists to Dubai to fill the gallery in a climate change conference. Two weeks ago, the President dabbed powder on the wound. He announced a cut in his entourage and those of his wife and ministers. The general attitude of the country to the looming disaster seems surreal. At N1400 for a dollar, alarm bells should be ringing. But in the highest offices in the land and amongst politicians, the dollar has become the preferred instrument of settlement and lubrication. Nothing moves the leaders of this country. In the middle of this economic tornado, a minister signed off air tickets to a non-existent Kogi airport. The new government met a mess. But it has been sloppy and haphazard.
At the outset, the President started bold reforms and received accolades. He said he removed the petrol subsidy to save the economy. In May last year, the subsidy was in the neighborhood of 300-400 per liter. Indeed, that subsidy had gone cancerous. But the President has run into a foreseeable storm. Many said he spoke before thinking. Others said he did it standing. The Igbo say when a child is conceived in a standing position, chances are it will be mad.
The subsidy the President yanked off on day one returned with a swagger through the backdoor. Now, seven months after the President received medals for removing it, the President is illegally and clandestinely running a heavier subsidy. He will argue national security. Yes, the masses are tired of fruitless sacrifices. But our West African neighbors have resumed feasting on our cheap fuel. The subsidy removal has effectively failed. The Dangote and other refineries coming on stream will need a level, open playing field. But the President, having failed to trim his government and cut costs, now lacks the conviction, moral and political, to see through the policy. Pride and propaganda have inhibited the government. While removing the subsidy, the President and his team didn’t think deeply. They either didn’t see that dollar illiquidity could strangulate the process or overestimated themselves and their ability to drag in foreign capital. The shit has hit the fan. But that isn’t the tragedy. Our politicians are aloof. On resumption, the President floated the naira. Prohibition on certain items was lifted. Free market folks clapped. At the time, the naira exchanged for 700 to the dollar in the parallel market. The President said the true value of the naira was below 700. The government said the vast gulf between the official and black market rates fueled dollar racketeering and discouraged foreign investors. Seven months later, the naira is in the mud. The exchange rate is about N1400 to the dollar at the parallel market. The gulf between the rates has widened. Foreign investments have retracted from the confusion. Inflation has ripped the roof, and nobody is talking about job creation because the economic environment is tremulous.
If the President and his team had no clear solution to the mountain of the backlog of dollar obligations left by Buhari and Emefiele, why did they allow the naira to go into this cage fight? Now, the naira lies battered and bleeding, and the dollar saunters around in homes and offices as the underground national currency. The tragedy isn’t the predicament of the naira. The tragedy is the casual detachment of governors, ministers, and senior govt officials from this frightening reality. So without wrinkles, the federal government travels cap in hand from Asia to Europe, scouring and scavenging, looking for pints of dollars to transfuse into the economy to resuscitate the dying naira. Some say the President will find his rhythm. The President must show urgency. The banks are feeding fat on the situation, selling dollars through the backdoor, but nobody barks at them. The dollar racketeering of the Buhari administration has returned with a vengeance. The widening gulf between the rates makes control impossible. Foreign direct investments are too paranoid to dip a foot in. In an import-dependent economy, this is a combustible mixture. People are becoming poorer daily. Food and medicines are going out of reach. The youths are jobless and hungry. With an unstable and perishing naira, with the inevitable return of fuel subsidy, with rampant banditry and kidnapping, the future looks utterly bleak. The President is too relaxed. His body language allows laxity.
The solution isn’t too difficult. Nigeria is a resilient country. The masses are forgiving. The population is youthful and politically docile. This gives the President ample room to mobilize the nation to face adversity. He can think it through, they won’t stampede him. However, the nation and its youths need a clear vision. Vision, not propaganda, creates enduring hope. The President might show a little urgency. A clear vision of a prosperous and united country of equal citizens must be painted with a brush of honesty. No outlandish propaganda. The President must lead by example. If he preaches cost cutting, as he should, then he must trim his cabinet and operating costs to the bone. Clear targets must be handed out to ministers and service chiefs. Those who fail must be sacked and replaced. The country must be run like a business. Governors will watch and fall in line. All traces of frivolity and wastefulness must be expunged and banished. Security agencies must get a special license to stamp out the use of dollars as underground currency in Nigerian politics and the public sector. The service chiefs must stamp out crude oil theft and banditry or be fired. We can’t continue borrowing what we are losing to thieves at home. We can’t continue the crowdfunding of ransoms. The activities of banks must be tightly controlled, and whistleblowers must be rewarded promptly. When we find a breathing space, then we can do constitutional amendments to devolve power to the periphery. The naira is dying. The President cannot continue with the equanimity of a Babalawo.
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