Nigerians now discuss the precarious state of their nation’s currency like the English would the weather. It is a perfect conversation starter, a lunch time topic of discussion in offices, the center of arguments at vendor stands, the theme of television and radio shows and even a choice melody for musicians, most notably the three blind minstrels who are fast becoming internet sensations for their analysis of current affairs in their highlife inspired compositions.
Unsurprisingly, Nigerians are getting used to the fact that the Naira is going down and down no matter how much the Central Bank tries to disguise it, and we are resigning to our fate. One day somebody said, we will wake up and the naira will be exchanging for a thousand naira to the dollar. It is like the daily question, how much is the dollar today?is our way of keeping tabs on this steady decline, like spectators in a horror movie in which our currency is the actor.
At this point, it is almost unfair to criticize the Central Bank for the situation or for their actions and inactions to stem the tide. Indeed some have suggested that it is time the CBN governor Godwin Emefiele resigned honourably to save whatever is left of his reputation, as he is now at great risk of being tagged the one who supervised the final demise of the naira. This argument is especially pertinent since the declaration over the weekend by Mr. President in an interview with foreign media, in which he let Nigerians know that he is now in charge of the country’s monetary policy.
That statement by Mr. President is unfortunate on many counts. For one, it is a contravention of the CBN Act 2007 which placed the overall control and administration of policies in the monetary and financial sectors with the CBN. Effectively, Mr. President has usurped the powers of the CBN, rendered the Monetary Policy Committee useless and is acting outside of the law. I am not an expert in these matters, but I don’t have to be one to know there is a reason why the Central Bank enjoys some independence enshrined in the law. The takeover of the Central Bank’s functions by the executive arm of government is a major recipe for disaster.
Even a common sense analysis of the situation would reveal how bad an idea it is. If I take over a role, it should be because I have the requisite knowledge and experience to do the job, and my decisions on the job would be borne out of sound intellectual reasoning rather than what I feel, like or dislike. Herein lies my worry. We all know that Mr. President is neither an economist nor a financial expert. Does he know enough about monetary policy to take decisions that are best for Nigeria?
“Oh well, he really does not need to know, that is why executives have special advisers,” I hear you say. Last I checked, we still did not have a Chief Economic adviser to the president, nor has the existence and composition of an economic team been made known to Nigerians. One is left to conclude therefore that Mr. President will be taking critical monetary policy decisions based on instinct.
Decisions that affect the economy are not things we leave to gut feelings. Those who should know have made arguments for the devaluation of the naira, with some others advocating that it be floated. However, not many agree with this ‘burying our head in the sand’ strategy of fighting a losing battle defending the naira while maintaining a dual exchange rate system that only serves to enrich a few pockets while the rest, including many businesses that put food on the table of millions of Nigerians, suffer. Mr President however says devaluing the naira is against his personal belief.
Personal belief? Seriously?
It would have been awesome if by some strange mechanism, the substance of one’s personal belief became superior to all others once you became president. Unfortunately it is not so. Indeed as president, you lose the right to exercise your personal belief. Your actions must be guided by the best interest of your people and this can include taking decisions that go contrary to your personal belief. Mr. President must be reminded of this fact. We did not elect him to foist his personal beliefs on us.
While I do not suggest that his standing in the no to devaluation corner is wrong –I am no expert in these matters remember?- it is only right and proper that he allow those who have been so appointed and empowered by law to take these decisions, to do their job. No investor, except one with cerebral disorder associated with careless risk taking, will invest in a system where monetary policy decisions are based on what the president thinks or believes. Indeed, voicing so openly that his Central Bank is now essentially redundant is all the information necessary to set investors running in other directions.
In the final analysis, food on the table is all Nigerians ask for and expect. The cost of the dollar has a huge influence on the type, quality and frequency of the food to our tables. We all agree that this government inherited a dire situation, especially with the crash in the price of our main source of foreign exchange, but like my people say, mbelede nyili dike, mana mbelede ka eji ama dike. It is from tough situations that we identify who the strong one is. We need solutions, not lamentations, not blame, and certainly not making an already bad situation worse.
First published here