COLUMNS

Why Defend the Naira? Why not Instead Defend the Industrial Capacity of Nigeria?

By Daily Dispatch September 22, 2023 108

By Moses Oludele Idowu

Something about economics don’t click with me. I don’t seem to understand modern-day Economics. It doesn’t make sense to me. Most of what our economists of today write and say don’t make sense to me.
I agree with Dr. Tai Solarin on this. That modern economists don’t make sense. But I read Professor Sam Aluko and Professor Eskor Toyo and I have their papers and articles and they make sense to me. I could understand them but I can’t understand these modern World Bank/ IMF School of economics. That was the same verdict of Uncle Tai.
Every prediction those two professors made that would happen if Nigeria continues the way it does through privatisation, liberalisation and other neo- liberal agenda of Breton Woods institutions have now happened: record unemployment, deindustrialization, inflation, stagflation, increase in crime, poverty etc. These two men were staunchly anti- SAP and Professor Eskor Toyo wrote a book of over 700 pages to show that SAP would never work. Unfortunately that book could not be published.
Professor Aluko pooh-poohed the idea so common among modern enslavers of World Bank/ IMF School that “government has no business with business.” He provided the economic history behind privatisation and why it made sense to the West but to us it doesn’t. He said in the West the people built the corporation which the public took over. Thus privatisation is giving back what the government took from their parents. But not so in our own case. The so called industrialists who are angling to buy privatized public companies have not built anything that we can see and it is not right to sell public- owned enterprises built with public money to cronies of those in power.
Today after privatisation power supply has worsened. The Discos still have to be funded with public money even after privatisation.
It is a fraud. A racket.
A so – called industrialist has taken humongous sum in billions of dollars to build refinery or something that we can’t see and now we are told he has repayed 75% even when the refinery hasn’t commenced work.
Crony capitalism, built on arbitrage rather than work, production. This is what is killing the naira.
That is what those two professors warned Nigeria against.
I remember that during one outing of Nigerian Society of Engineers at Sheraton Hotel Ikeja when Kalu Idika Kalu, one of the brains behind SAP was invited to give a lecture I took him up publicly citing those recommendations of those two renowned professors to counter his position during the SAP debate in 1988. He had to deny he was the author of SAP, and was uncomfortable because these were two of Nigeria’s best brains in Economics known worldwide.
It is now clear even though these men are dead their prophecies have come to pass about Nigerian economy. The only thing that is yet to come to pass is the coming of Adolf Hitler. Aluko said Germany had to keep appointment with Hitler because her economy failed and the way Nigeria is going the same may happen. That has not happened but with naira exchanging for N980 we are on the way – unless God intervenes.
I also remember that these men were opposed to devaluation of the naira. You will notice that throughout Abacha’s reign when Aluko managed NEIC the naira exchange rate did not go beyond 88 naira to dollar. It stayed permanently on that spot. Despite the fact that Nigeria was a pariah and blockaded on everyside.
So how did he do it? How were they able to achieve that?
Now let me get down to details.
Why is Nigeria naira so weak? Why does it need to be defended?
Because there is nothing backing naira or propping it in international market in form of exchange. Nigerians are not producing they are consuming.
They have no industries except the Miracle industries, Politics industry, Religion industry and Prayer industry. See how much was given by a certain governor in billions of naira to marabouts to go to Mecca to pray against Boko Haram?
These are the phony industries Nigeria has and they don’t bring foreign exchange except to consume it. Observe how much we spend annually on pilgrimages. Buhari had to allocate billions of dollars at concessionary rates for pilgrims. What do they bring back in return? Prayers.
So these phony industries Nigeria has will make naira to be weak and insolvent.
I am not an Economist but I have read a bit of Economics History. It seems to me that we are headed for a deep Depression unless we change our course.
I warned in 2015 that History shows that economic failure or collapse usually precedes totalitarianism. Noise and mere platitudes won’t stop coups if the economy is not responding to treatments.

Here is my layman view. Instead of spending scarce dollars defending naira, why not use that money to help local industries, farmers, SMEs, revitalisation of PWDs… Forget about the dollar, provide jobs for your own people and let industries take off.
Give concessionary rates of diesel to genuine industries to lower their operating costs. Put everyone back to work.
The way Nigerian government fights poverty is the wrong way. That is why they ended up producing more poor people. You don’t train people two months and then give them money, it isn’t done that way. What happened to YOU WIN of Jonathan, Buhari’s poverty alleviation program.. and the billions spent? What happened to Anchor Borrowers Scheme? Poverty is now increasing because our government doesn’t know elementary economics. This is why Nigeria missed Professors Sam Aluko and Eskor Toyo.
Professor Aluko was angry and complained about the way Obasanjo was running the economy selling everything owned by the people to the same cronies who have no known history of even running cottage industries. We have now ended in the disaster he prophesied we shall end up. Or are we still approaching it?
When you have a man who is consulted by United Nations and you ignore the opinion of such a fellow then you deserve your fate.
We are poorer today.
Everything is out of course in Nigeria because our men lack ideas.
German Dutch was worse than a tissue paper when Hitler and the Nazis came to power in the 1930’s. But in 6 years Hitler turned it around. How did he do it ? That was why Germany followed him to war. He performed an economic miracle.
The methods he used are well documented in Economics History. And they could be applied in Nigeria. I sent two Memos to Muhammadu Buhari on the day he was being inaugurated for the second time after watching the disastrous way he spent the first four years. If he had followed them we definitely won’t be here. We may not have been out of the woods but we will definitely not be in a sithole today.
Sometimes I weep for Nigeria and find a way to forget about Nigeria so I won’t lose my mind.
We are spending money in an elusive way to defend the naira yet the naria keep falling because Nigerians are idle and doing nothing that the world needs. It would have been worse but for the Diasporic Nigerians who are sending money home. Unfortunately even these dollars find their way back through thieves in CBN, round trippers, and pseudo- industrialists like the promoters of a refinery that is already commissioned yet can’t refine a barrel of oil. Many of such are in Nigeria, gaming the system.
One day we shall have someone as leader who understands Economics or how Economics work. Awo was unique because he understands how Economics work; he was a researcher. He knew what the Free Education program would cost the West to educate each child and what tax the parent would pay to raise the required money. He did his studies to perfection.
That was why it succeeded in the West but failed in the East. Because there was no study or in- depth research.
Roosevelt is another leader who understands Economics. All American banks had closed due to depression when he came in 1930 and before the decade was over he had turned everything around.
Hitler was and the Nazis , you may say what you like about them, were another group who understand how Economics work.
The tragedy of Nigeria is that most people who gatecrashed to power never understood Economics except to spend and spend and spend.
Someone has a cabinet of 48 ( or is it 50 now?) and we complain about money?
Indeed, Apostle Babalola was right: administration is not a gift of the black race.
But one day we shall have a Joseph in Aso Rock who understands how to manage Economics and how it works. Then Nigeria’s tears would cease on that day. But for now, the sufferings continue for those who don’t know.