I discuss Nigeria and the world at large because I strongly believe MyOpinionCounts!

Month: February, 2016

!Babawale’s Robust Response [!BRR]

Babawale Olubiyi Dolapo is a financial market enthusiast. He is on Facebook.

Adefisayo Adesope: Our so called economists seem to always make the same mistake. You cannot shut down imports totally or impose FX policies without a strong export base. You will kill the currency and mess up the economy. Once we are able to feed ourselves through an agricultural revolution, we can then shut down imports and focus majorly on exports.

!BRR: Now to the serious observation Fisayo has raised I will try to explain, align with some and contend with the remaining views. Very salient point you have raised, however, our present problem isnt really about shutting down import to boost local production. Our problem is short supply of petrol dollar and towering demand for same from Nigerians. As any import restriction regime, local production enjoys the tradeoff and in our history we know this is usually short lived as soon as petrol dollar piles up and restrictions lifted. So I agree with your notion that you will harm your currency if you  restrict import and there are no local alternatives. I also agree that we can feed ourselves, shut down import and also export…

…however, I do not believe or align with your assumption that this import restrictions was done with the mind of generating local production; rather the CBN is trying to maintain a minimum balance on our fx holding as supply dollars to every demand for it will thin out our fx reserve and we will be barely become the Greece of Africa. Alternatives suggested by Economists and Pundits are: 1. Devaluation 2. Floating Let me start with floating: it will interest you to know that what the CBN was operating before totally yanking BDCs off it’s list of dollar receivers is called “managed float” where BDCs and market forces determine a fair price for dollars while CBN maintains an official rate to protect genuine Nigerian businesses, but we ended up with a “spread” of more than 60naira and same people asking for devaluation after they have starked up dollars in their vault. Now if the CBN buckle and goes ahead to float totally, pundits assume dollars will regulate. I disagree, rather, the power to regulate leaves CBN and market forces determines Naira’s perceived value, I don’t know a single nation serious about economic security that floats it’s currency…Devaluation (to be contd.)

Devaluation is not new to us,  in fact it seems like our default retort when we have a little issue with fx supply or when the CBN governor feels honored to be “The Economist” person of the year. Devaluation has been done so many times that the Naira is already numb and hardly appreciate significantly months after our petrol dollar floors our fx account; so with the 2 options economists are suggesting (it is imoerative I say that they want either of these done with the CBN taking those items of restriction list), you will project that the specualtion will wane but the news around town is that growth is slowing down globally; when this happens, hegefunds, foreign investors take flight to safe haven (dollars and gold) and this is one of the main reasons gold is appreciating while other metals and commodities are tanking. We as a nation cannot pretend the world growth decline wont affect us neither can we start expecting harvest when we failed to plant. Now that we are finally here, which way forward?

Way forward: if I was given a chance to advise, I will say the following- -commend the CBN for it’s stick-to-it-tive-ness -suggest we run and tidy up the planned 25billion dollars infrastrucre fund planned by FG  apart from the following, there’s very little we can do , the monthly demand for Fx for November was around 2.5billion dollars down from over 5.6billion in previous months(if my data is accurate). Restricted items on CBN list are not restricted items on customs’ list so importers are at liberty to source through alternate means. If we commence industrial and agric revolution now(which I support just like you do too) we cannot expect the gains in 6months. For me, the first thing we need to get out of this quagmire is for brent crude price to head back up; we haave learnt our lessons, we have a new govt with a new promise of better economic planning, we need forces of nature to work in our favor.lol.  I stand to be corrected on any error or mis representation of facts. Thank you for the audience. Robust reply is not so difficult afterall, I therefore call on Pastor Fatoyinbo of “higher level of grace” fame to swallow his pride and render unto us that anticipated robust reply. Enjoy.

Editor’s note: This post is copied from a Facebook thread with permission.

OpinionPo!ntBlank! (OPB!): Between “Guilty Conscience” and Personal Vendetta by Ajibola Fabusuyi

So a Dr. Aluko, former Secretary-General of the People’s Democratic Party in Ekiti state woke up one day, and pricked by a “guilty conscience”, suddenly decided to open what he rightly hoped would have the effect of a can of worms that is ostentatiously opened right in the middle of the market. According to him, former President Jonathan gave a sum equivalent to N4.7b to prosecute the last gubernatorial election in Ekiti. The alleged sum was given to “them” in US dollars, was taken to Spotless Hotel in Ekiti (one allegedly owned by Ayodele Fayose who eventually won the election in a landslide fashion), from where “they”, himself included, took it to Onitsha where it was exchanged into naira- a whooping N4.7b and then shared!

Upon answering the question as to why he was making this confession at this particular time, Dr Aluko answered that two reasons were responsible for his sudden decision i.e. to become “born again” and then confess the crime allegedly committed by himself and some other individuals against Ekiti state, especially governor Fayose, Dr Aluko gave two main reasons. The first was his anger with, and disappointment in Fayose for daring to renege in his agreement with him before the election (a vow they made, using the bible, for that matter!) The agreement was to make one Femi Bamisile the Deputy Governor and himself Chief-of-Staff. You would remember that upon “crossing” to APC late last year, Dr Aluko first made this latter confession, basing it on the main reason he was leaving (the second reason being that Fayose was running the party like a personal business and a de facto Fascist). The second reason Dr Aluko gave for his turn-around this time was that his conscience would not allow him to sleep, concerning the injustice he and others did to the good people of Ekiti state! He went further, as he has been doing recently to ask the Ekiti people to forgive him.

Before you start grinning, let me remind you of the real reason why Dr Aluko’s conscience suddenly became not only born-again, but also sprout a tongue and could now bawl. Gov. Fayose, instead of giving him the political post agreed upon, was first silent about it all upon winning the election. When he finally acted, he offered him one of the state Boards to head, instead of the position of Chief-of-Staff, which he deserved, the cheek of him! Now, apart from the pressman who posed the question, you, as a Nigerian may start asking yourself the nagging question as to why now, two years after the money was “given” by the then president, Dr Aluko suddenly felt it right to make this confession. After all, Dr Aluko would definitely have been grinning to the bank every month and every other time money is shared, had he been given the post he was promised for his troubles in selling Fayose to the Ekiti people. After all, he alleged, the election was actually rigged in favour of the incumbent governor, and the money used was brought in by the then Minister for Defence Musiliu Obanikoro, in the presence of many other personalities including the then Minister for Police affairs, Jelili Adesuyan and others.

My take on this is this: if the Nigeria Police were a real and effective force, Dr Aluko would have been arrested by now, made to confess more of this crime, be made to show the proofs of evidence and subsequently prosecuted at a competent court of law, along with other cohorts who committed the crime. Further, he should have been invited by the EFCC and other anti-graft bodies and if found guilty, should be made to face the wrath of the law squarely.

But if I know my country well enough, this will not be done, in fact, if the antics of the ruling APC is to be well observed, Dr Aluko would be lifted high for exposing the PDP and discrediting Fayose (as if the latter had any credit in the first place, anyway). In fact, he would be given a ministerial post as soon as Buhari decides to re-shuffle his cabinet, even if any offending state panel of enquiry has indicted him! A colleague and I were discussing yesterday, and he said something quite instructive; if Buhari was to leave as president now or anytime soon, the next thing would be that the EFCC would just dance to the tune of the next president, simple and straight forward. He concluded that all we needed in Nigeria was what obtains in other “serious” countries of the world i.e. build and strengthen strong institutions (including anti-graft bodies), which would outlast any government. By so doing, we would have moved beyond acting upon the body language of the president, whereby we do some eye-service to impress whoever is in power.

While I agree completely with this, I also think Nigerian leaders could do better than playing politics on serious national issues. The Tinubus and the APC should stop looking for scapegoats, (who are no worse than they are in this case) to discredit. Do not get me wrong, everybody knows that money sharing, power-grabbing individuals mainly populated the PDP). But what’s new? What makes them different from members of the APC anyway, except that every member of the party is a saint, including those that recently crossed-over to them from the PDP? Secondly, the anti-graft laws that punish individuals that misappropriated funds are too soft and must be overhauled. Let us make stricter laws to punish offenders, let us recruit men of honour and integrity to serve in these anti-graft bodies and by all means, let us reduce the power of the president. Thirdly, may I ask the salient question, which was also asked by Prof. Akin Oyebode, why would President Buhari not even consider looking into the draft of the last Constitutional Committee? Let us remember that this committee included people and almost every interest from all over the country and is the first time Nigerians were allowed to discuss how they wish to be ruled in their own country. Is it because it was constituted by the former President Jonathan or is there something to hide?

I submit. God bless Nigeria!

Mr. Ajibola Fabusuyi is a lecturer at the Obafemi Awolowo University, Ile-Ife Nigeria.

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