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Naira: Comedy inside a tragedy, By Dakuku Peterside

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On Sunday, August 15, 1971, the United States economy was literally facing a firing squad. The Dollar was in a mess. Price gougers were everywhere, and foreign exchange was cruel to the Dollar. The newspaper headlines were full of scorn and ridicule, but President Richard Nixon did one thing. He faced the issue squarely.

“The strength of a nation’s currency is based on the strength of that nation’s economy,” he said. Nixon nipped the problem in the bud. Everything changed. He rescued his country from financial and social crises. Today, Nigeria is in a similar situation, albeit slightly dissimilar, given that the American economy is by far the strongest in the world. Thus, President Bola Tinubu needs to act in a manner that moves the nation from “Renewed Hope” to “Renewed Confidence”.

The loss of hope was what triggered the Arab Spring and other springs. In December 2010 in the town of Sidi Bouzid, Tunisia, Tarek El-Tayeb Bouazizi, a trader who had lost hope in the economy of his country set himself on fire. That act became a catalyst for countrywide protests. The protests included several men who emulated Bouazizi’s act of self-sacrifice. Hope is good. However, hope is not edible.

In Nigeria, there are reported and unreported suicide cases due to economic hardship in the country. A few weeks back, a woman who worked at a bank locked herself in the convenience of her company and swallowed poison, leaving behind a suicide note which points at her giving up on Nigeria.

With the free fall in the value of our currency, we are beginning to see more public expression of frustration. In the coming months, the unrelenting fall of the Naira could lead to an increased risk of suicide and even social unrest. In Kano State, where social unrest forms quickly, a group of local bakers warned the government about things to come. They protested the high cost of flour with a bag that sold N10,000 a few years ago now selling at N41,000. The Kano bakers cannot afford the price spiral and social unrest arising therefrom could pose additional risks to economic recovery and create setbacks with lasting impact on general economic performance.

For a government looking for an economic spark plug through Foreign Direct Investment, FDI, and business startups, the fall of the Naira and global jokes about it are downright depressing. The fall of Naira indeed poses grave dangers to the viability of businesses in Nigeria. Last August, Iyinoluwa Aboyeji, a young Nigerian celebrated all over the world for creating two unicorns and a general partner at early-stage venture capital firm, Future Africa, told Rest of World, an America-based publication, that his firm is advising its portfolio companies to explore business abroad to avoid Naira-related challenges.

Jokes about the Naira

Over the past two weeks, social media have been awash with hilarious jokes about the Naira. This is not restricted to Nigerians. First, a Toronto-based television station announced that Nigeria’s currency was now worth 0.0011 American Dollars. This was followed closely by a South African Prokerala showing that one Zimbabwean Dollar equals N2.77. In its February 2, 2024 edition, Bloomberg described the Naira as the worst-performing currency in the world. In their cartoon section, two US newspapers taunted Nigeria over the Naira. This is infinitesimal compared to the number of local jokes about the Naira in our media. Besides, social media has amplified the crash of the Naira to such an extent that Nigeria has literally and metaphorically become a laughing stock. Nigerians are either losing faith in the country or have lost a sense of patriotism.

These hilarious jokes and caricatures are a metaphor for a bigger problem.

There are genuine concerns that Nigeria may follow a similar trajectory to Zimbabwe and Venezuela. This concern is well-founded. The echoes of Zimbabwe ring eerily and loudly in Nigeria today. There are many reasons why history students could look back on the crash of the Naira and its impact on our reputation, global stature and the living standard of our people. This concern is heightened for many reasons. However, I will highlight only a few.

The first is poor policy articulation and implementation. Recall that the policy origin of the current Naira tumble can be traced to the simultaneous removal of subsidies and years’ long currency pegs last year by the current administration. This was done without considering other factors that need to be in place to make the economy function optimally. Nigerians are worried that our economy handlers are not doing enough to stem the decline.

The second is the damaged reputation of the country occasioned by the Naira crash and the ongoing economic and security instability. Local and foreign investors are losing confidence in the Nigerian economy because of high-level financial, economic and political instability.

The next is that the cost-of-living crisis escalates and inflation ravages the country. Prices of essential goods and services are going off the roof and people are perplexed at the rate of degeneration.

The fourth is that microeconomic indices are unfavourable given the reduction in demand for goods and services due to high prices and reduced supply. The latter itself is due to lack of production or high cost of importation.

Also, there are unfavourable macroeconomic indices such as escalation of unemployment. This correlates with a high crime rate, high inflation occasioned by a fall in the value of the Naira, banks’ inability to grant medium to long-term loans and general perception of impending economic catastrophe hovering over Nigeria like an ominous overcast.

The fifth is that wealthy Nigerians and other average citizens worried about the erosion of the value of their money and assets are converting them into Dollars or are moving their assets to dollar-denominated investments abroad to hedge for further loss.

Finally, the volatility of the Naira implies that fresh capital investments in infrastructure and power, mainly dependent on imported plants and machinery, shall be negatively impacted, leading to projects being put on hold.

How did we tumble in such a short time from a respectable nation to a butt of jokes? Not only amongst us but within the global community?

A brief historical odyssey on Naira volatility suffices. The tragic history dates back to 1983 when the Naira began its nosedive and successive governments have failed to ameliorate the plunge. In 1983, $1 was exchanged for about 72 Kobo. But the Naira fell to trade at about N9 to $1 by 1990. In 2000, $1 was exchanged for about N85 at the official window. In 2010, $1 was officially exchanged for about N150, but more at the notorious black market. By 2020, $1 was exchanged for about N360 at the official window. In recent years, the Naira has faced challenges related to external factors. These include fluctuations in oil prices, the global economic impact of the COVID-19 pandemic, and serial mismanagement.

A cursory look at this administration’s response to the Naira crisis shows an attitude of calm amidst the panic at the early stages of the free-floating of the Naira, as policymakers expected the fall in Naira. However, there were more panic reactions to this problem as the President and his economic team worked to stem the tidal wave blowing the Naira. Recently, we have seen monetary, fiscal and tax policy adjustments, and currency interventions to boost the Naira. Structural reforms by taking steps to diversify the economy to reduce dependency on a single sector and improving the business environment to attract foreign investment are ongoing. Unfortunately, these policies and actions have not stabilised the Naira in the short run. More needs to be done and quickly too. There is no one-size-fits-all solution, and a combination of strategies may be necessary.

Additionally, the success of these measures depends on practical implementation and the cooperation of various stakeholders. Investor confidence remains our greatest challenge. It is advisable for this administration to carefully analyse the specific economic conditions and consult with experts to tailor appropriate solutions for the country. Every good head, home and abroad must be brought into the room to stop us from remaining a butt of jokes. Saving the Naira is most important now and all stakeholders must work together to end this comedy show.

Strictly Personal

Nigeria’s Currency Crisis: Time to deploy Amotekun, By Chinedu Chidi

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I have thought long and hard about just the right solution to the downward spiral of the Naira, and confidently believe I have come up with the perfect response. It is my humble proposal that the time is right to deploy the dreaded Amotekun to arrest this situation. I’ll explain why.

 

Since it is now clear that the Naira’s salvation is not in the hallways of the CBN or the gold-plated policy rooms of Bretton Woods, but in the battle grounds of the nook and cranny of Nigeria, all patriotic Nigerians must now rightly ignore suit-wearing technocrats and search for militant solutions with real promise. As a patriotic citizen, I have risen to this challenge. I would humbly like to thank the patriotic Nigerian leadership, from the CBN to the Executive, for leading us into this new era of mortal combat.

 

Only a few days ago, we were greeted with the live action scene of security operatives combating BDC operators in the nation’s capital, discharging live ammunition in broad daylight in an open civilian space like fearless patriots at the battle front. The EFCC and accompanying security operatives charged forward and backwards as the enemies of state dared challenge them. It was almost like a combat scene from Gibson’s Braveheart. I was touched. I’m not too sure, but I may have heard the humming of the national anthem from these fearless patriots as they battled the savage saboteurs. What a touching moment! Someone who was at the scene mentioned that these patriots recited the pledge before the onslaught. I can’t confirm this for sure, but if it did occur, it would be consistent with the new nationalistic fervour of the Tinubu administration as reported in the news recently that citizens would be required to recite the pledge at events. I also hear the operation is going on in different parts of the country. All these, coming only days after Sahad Stores, a retail supermarket in Abuja, was forcibly shut down for “economic sabotage”, fill me with great joy. Some unpatriotic citizens had shockingly opposed the move, claiming Sahad Stores was one of the good ones, and that deploying force would not resolve the inflation crisis. Cowards and co-conspirators! They’re too distracted by textbook ideas to see that we’re in war. Shame.

 

Normally, I would have recommended the army for this most important national assignment, but they’re overstretched. They’re battling terrorists, bandits, armed robbers, secessionists, their welfare; just about every violent aggressor around. The police would have been my second option but they too are preoccupied and, as some mischievous people claim, have a special DNA for compromise. For these and some other reasons which I will explain, Amotekun has my blessings.

 

I know Amotekun is also seriously engaged with battling bandits in the South West, but they must be pleaded with to spare some personnel for this all-too-important national emergency. Their stealth, daredevil disposition, and my favourite—charms from the gods— will come in handy.

 

I have heard rumours that some of the BDCs hide their stockpile of dollars in forests. This is the domain of the Amotekun warriors. Through their local intelligence gathering and tactical navigation of the forests, they can uncover these dollar chests and win for the country a huge deliverance. Their spiritual protection against wild animals and attacks from dark forces will be very useful here.

 

I am also confident that what has for so long appeared to be the near-impossible goal of finding the dollars some loud-mouthed people claim are hidden by politicians, bank executives and— I struggle to even contemplate it— CBN officials will be spiritually detected by Amotekun. We desperately need this.

 

It was with great joy that I also received the news that our gallant security personnel are now stopping truckloads of food from leaving the country. What took them so long! How can any patriotic businessman think of trade and profit at a time of economic crisis? This beats my imagination. I am even more infuriated by the argument of their unpatriotic defenders that we don’t have food scarcity, just food unaffordability, and that we can’t seriously let them abandon their goods in warehouses while the vast majority of Nigerians can’t purchase them. This is so inconsiderate and sad. Their argument that the exports bring in needed forex at this time of forex crisis is also another textbook nonsense. Shame on them.

 

I am particularly touched by Cardoso’s sincerity and humility. Realizing that the air-conditioned policies have hit the brick wall and that the fight has morphed into street combat, he did not try to deceive the populace about it. This is uncommon (apologies to Akpabio) pragmatism.

 

I want to enjoin the President to rally leaders in the South West towards mass mobilization of Amotekun for this national assignment. We can’t afford to fail!

 

Chinedu Chidi is a public affairs commentator. He can be reached via: chiobe24.cc@gmail.com

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Strictly Personal

The problem of DRC’s beautiful wife, maize it planted by roadside, By Charles Onyango-Obbo

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Watching the upheaval in the Democratic Republic of Congo in recent days, one is tempted to invoke the African proverb that “the man who marries a beautiful woman and the farmer who grows maize by the roadside have the same problem.”

The police fired tear gas on Monday to disperse protesters who burned tyres and US and Belgian flags near Western embassies and UN offices in the capital Kinshasa, angry about insecurity in eastern Congo.

The protesters claim the West supports Rwanda, which they and their government accuse of backing the M23 rebellion, whose advance could see them seize the strategic border city of Goma in the east.

This is a new phase of what has become an entrenched tradition of the Congolese oscillating between blaming everyone else but themselves for their problems, and demanding that other people solve these problems, including fighting for them.

In recent years — rightly — the Congolese have railed, then attacked, the long-running and ineffectual United Nations Organisation Stabilisation Mission in the Democratic Republic of the Congo (Monusco) for not ending the rebellion in the east.

In late 2022, DRC’s kin in the EAC dispatched the East African Community Regional Force (EACRF) to separate the warring sides. Before long, Kinshasa and the people had risen against them, hounding them to go out to the jungle and fight the rebels for them. At the end of last year, EACRF left DRC with its tail between its legs.

Because the Congolese are our brothers and sisters, and we have a responsibility to love them, we also have a duty to tell them uncomfortable truths that will help them overcome.

So, we will return to our proverb. African proverbs are complicated. First, one needs to know that they passed into society through the mouths of men who were not feminists, so too many of them tend to portray women in bad light.

This one paints a heroic hard-working farmer (although it is mostly women, not men, who work the land in Africa) whose maize is stolen by passers-by, in contrast with the beautiful wife who betrays her husband and falls to the charms of other men.

However, African proverbs are also layered, so there is what they say, and the many things they mean. In this case, that people will covet a good thing — a good crop, a beautiful woman and, if we may add, a handsome, enterprising man. The “problem” here is how to keep your maize, beautiful wife, and enterprising husband. If you are better than all the men who hit on her, your beautiful wife will stay faithfully by your side.

Having your wife, husband, girlfriend or boyfriend run off with someone else can be very hurtful, but if you have a cantankerous truth-telling African aunt or uncle, they will also whisper to you that a partner whom no other man or woman has ever or will ever want is probably not worth having.

In real-world Congo politics, then, the reality is rebels will have friends and allies at home and abroad. Even Uganda’s Lord’s Resistance Army (LRA), as despicable as a rebel group can ever be, had friends outside who backed it.

The thing that should terrify everyone is a rebel group that no one wants to touch with a 10-metre pole, both in the day and night. The opposite is also true of rebels fighting to overthrow a government. If it is a government that doesn’t have a single friend even in the cynical world of geopolitics, then it’s probably worse than a cabal of cannibals.

For Congo, what is left is how to solve this “problem”. To stay with the farmer and the beautiful wife, what the Congolese are doing is like the strapping young man in old Africa who spent all his time attacking his parents, relatives, neighbours, and their friends because they failed to give him cattle to pay a bride price for a wife and build a hut for him to live in with her.

The scale of surrender of agency by many Congolese, including the political class and the government, is unsettling.

It’s partly understandable, too. The unusually brutal Belgian rule; the exploitation of all sorts of vultures for its vast minerals lasting over 100 years now; and an unbroken long spell of corrupt and cruel rule, have broken its self-confidence. The way to come to terms with the scale of failure and remain sane is to externalise all the problems to evil forces.

It has led to national paralysis, a belief that they can’t do much on their own to overcome.

DRC’s neighbours to the east, Uganda and Rwanda, offer good lessons. When President Yoweri Museveni took to the bush with his small band of rebels in 1981, the odds were stacked up against them. The British had a big programme with a special police force; the Tanzanian army that helped overthrow military dictator Idi Amin was on the side of the government, and hardy North Koreans soon got into the fight against them. They still won.

The prospects were even worse for the Rwanda Patriotic Army/Front when it crossed from Uganda and took to treacherous hills in 1990. Apart from Uganda, it was alone against the world, including one of the world’s superpowers at the time, France, which was in bed with the government in Kigali. They suffered setbacks, picked themselves up, and won.

Congo can win, but first, it will have to plant its own maize and fight its war for its own beautiful wife.

Charles Onyango-Obbo is a journalist, writer, and curator of the «Wall of Great Africans». Twitter@cobbo3

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