Late last year I made a call asking that we should declare a state of emergency on our economy. As I watched the oil prices plummet without restrain, as I watched our income drop with with such rapidity, as I watched our Naira depreciate against the dollar and other foreign currencies at rates never seen before and as I watched President Muhammadu Buhari( PMB) take unusually long time in assembling his economic team, I went into panic.
I was troubled, that right in our faces, our economy was unravelling and the response by the only government institution that was working at the time- the CBN, though apparently sensible, only seemed to complicate the situation. The ban on 41 products from accessing Forex from Government funded Forex market made sense. If you did not have enough money to pay for all your needs, you would naturally prioritize and decide to go without some. If that caused you to have gastric ulcer or made you sweat profusely in the heat, that will be the consequence of your choice. The ban on payment of Foreign currencies into domiciliary accounts did not make as much sense and the accompanying ban on using the forex in your domiciliary account to pay for goods and services abroad was even more confusing and in my opinion wrong headed. If you were short of Foreign exchange, would it not make better sense to encourage all those who have dollars or pounds to bring them in, rather than keep them out?
As a consequence of some of these adhoc measures, our operating environment quickly lost allure. And as the gap between the parallel market and the official exchange market rates( N385 vs N198 as at weekend) enlarged, the more hesistant foreign Investors became. They would not bring their dollar and exchange at 198 Naira at the official window, whereas the same dollar could earn them 380 Naira . And so they wait. And with that the forex scarcity worsened. The matter of adjusting the official exchange rate of the Naira seems to be the central issue now. And with the repeated refusal of PMB to authorise the CBN to adjust the exchange rate of the Naira and bring it closer to reality, and the apparent lack of any worry by the government with the daily depreciation of the Naira at the parallel market, it is clear that we now have two clear foreign exchange markets. The official market which is supposed to be run by the CBN and which provides 'cheap'dollar for procuring 'necessities' as defined by government, and the parallel market which is run by Bureau De change ( BDC) operators and the ubiquitous Mallams designed to provide 'costly' dollars for those interested in procuring 'non-necessities' or ' luxury' goods.
Ordinarily, this would look like a very nice arrangement- choose ye this day which market you will patronize! But there are problems. The first problem is that the official forex market is currently and patently unable to meet the 'necessities' even as defined by the government. Many Manufacturers and importers of essential raw materials and other critical manufacturing inputs have not been able to open confirmed LCs for many months now. Many manufactures including drug makers report fast diminishing raw materials inventory and an impending scarcity. The second problem is that many suppliers or producers of the 'necessities' do not even get the forex at the CBN quoted price from Banks. Many are paying premiums and others collecting arbitrage .This is of course a normal economic behaiour when the prices of scarce commodities are fixed or controlled. There will always be arbitrage anywhere in the World! And often the corruption line is crossed as consumers lobby and pressurize the exclusive suppliers. In a Country fighting corruption, this may not be helpful to the cause. The third problem is that many of the producers or providers of the 'necessities' have to source other 'non-essentials' from suppliers who source forex from the parallel market. When the second and third problems are compounded,then manufacturers or suppliers of 'essential ' goods have to adjust their prices upwards and this is fuelling inflation in the economy. Today, this has resulted in a spiral effect on all items in the economy including locally produced agricultural products. Everybody is blaming the dollar! And the government seems to stand aloof and hoping that things will square up!
As I said, I had called for the declaration of the State of emergency on our economy before PMB finally appointed his cabinet and the economic team. On seeing the quality of the cabinet, with stars like Okey Enelamah , Udo Udoma , Babatunde Fashola ,Ogbonnaya Onu Audu Ogbeh, Chris Ngige, James Ocholi etc;watching some of the measures that have been taken since then, I was no longer sure that we needed to declare the emergency. The restoration of the effective use of the domiciliary account by account holders was one good step taken. I quickly applauded this move and asked the CBN to take more such steps in quick successions. And then a robust National debate on what we need to do concerning the Naira exchange rate spearhead by the cerebral Bismack Rewane and Moderated by PMB himself opened. Many writers have been writing opinions, conferences and Seminars are holding everyday discussing the economy and making very useful contributions. As if the voices of the local people are not loud enough, PMB and his economic team have been on an extended tour of the World and must be listening to many foreign and Nigerian diaspora voices.
So when Professor Wole Soyinka walked into an unusual terrain last week, I was jolted .On a visit to Minister Lai Mohammed's office last week, he asked for an emergency economic conference or Summit to discuss Nigeria's economic future, I was jolted because I seldomly hear the Professor speak on the economy, nor have I seen him in any economic summit before. Yes, he comments often on political and Socio- cultural issues, occasionally sparring with President Obasanjo and often acts as the conscience of the Nation. Ordinarily he is bold and speaks his mind . Though he is purely human with his own share of human weaknesses, he is generally a serious personality and when he speaks, many people take him seriously. He is not seen as frivolous. In that visit, he was very liberal with his praise for PMB's government on its ANTI CORRUPTION and other actions. But why will he call for an emergency economic summit? Is he not satisfied with the way the economy is currently being managed? Is he not comfortable with PMB's economic team? Is this an open admission that on the Economic front, the government needs help and needs to listen to more views?
For me I think there are currently enough views on the table. What may be required is a cold-blooded review of all the views by the economic team and then the courage to present the options to PMB with the consequences of every option fully spelt out. If the President is being inflexible or too strongly or emotionally fixated on a suboptimal option, some body should be courageous to tell the President so . Now this is where Prof Wole Soyinka may come in handy. We should arm him with well reasoned options and get him to see the President. If there is one Nigerian who can face the President and tell him the truth- bitter or sweet, Wole Soyinka would be that one .One thing is sure, no one can take away his Nobel prize in literature! We may find this my proposal cheaper and faster than calling an emergency economic summit now. We can then await the next Nigerian Economic Summit( NES)
Mazi Sam Ohuabunwa OFR