Our destiny in our hands

Economics was always one subject that had a great crush on me in my secondary school and later the university. Economics is ruled largely by laws but an interesting aspect of it is that these laws are themselves subject to an overbearing condition called “ceteris paribus” – all things being equal. On a mischievous historical note, one could compare with the words of a gap-toothed former military president who once said he would hand over “Insha Allah”. The intrigues of “ceteris paribus” are indeed a mystery because oftentimes, all things are never truly equal but made to look so. It is unlike mathematics or the sciences where the answers are predictable and precise. It is a trait that somehow presents economic predictions as not infallible. After all, it was Karl Max who posited that “philosophers have only interpreted the world, the point is to change it”.

I recall back then in my first year at the University of Lagos, during a lecture by a very distinguished professor of economics, I had posed a question: “What happens when a country refuses to pay its debts?” The class went silent as the professor struggled with the unexpected question. He tarried a while before answering: “Nothing, absolutely nothing will happen except that no country would want to lose its credibility.” That question, which was relevant at that time (when the country’s debt profile was just beginning to rise), is still relevant today when the debts have piled up so much so that the country’s shoulders are now dropping. The debt situation is much worse now and would have kept piling if Nigeria were to yield to international pressure to devalue the naira further. But it is heart-warming and reassuring that the present government of Muhammadu Buhari, known for fiscal discipline, has said outright no to further devaluation.

Devaluation therefore is actually the real destination of this piece and, were the situation to play itself back, one would probably rephrase the question to: “What happens when a country refuses to devalue its currency?” This time the question would no longer be directed at a lecturer but to the maze of public opinions of a generality of Nigerians.

Economic measures have always ended up taking more from Nigerians than the succour they were meant to bring and even at the best of times, Nigerians have never truly felt the benefit of the nation’s prosperity and have never had their fair share of the common wealth. Except perhaps for fuel subsidy! The same cannot be said of economic thieves and treasury looters who are the bane of our development. If the present realities are any measure of economic palliatives taken in the past, then the country has failed woefully in that regard. It is a lazy, selfish and jaundiced prescription for these foreign institutions to always recommend devaluation to developing countries as a way out of economic recession.

Economic measures are oftentimes reactions to gross mismanagement of the economy. But for some wicked and corrupt administrations, we would not get to this point. After running the economy aground, Shehu Shagari in the eighties imposed austerity measures. Former military President Ibrahim Babangida dribbled Nigerians into accepting Structural Adjustment Programme (SAP) and set off a regime of unending devaluation of the country’s currency. The 16-year reign of the People’s Democratic Party (PDP) under different administrations was corrupt and profligate, borrowed excessively with little to show for it and made the naira value to nosedive progressively. From a very strong naira that was at par with the almighty pound sterling and double the value of the dollar emerged a weak and emaciated currency, yet the Western financial institutions tell us to devalue further. This is the dilemma facing not just Nigeria but indeed Africa and the rest of the developing world. How many African or Third World countries that followed the economic blueprint of these powerful financial institutions are better off today?

When countries of the West suffer economic recessions, why do they not swallow the bitter pill of devaluation as a way out? After all, even the almighty America found itself broke at the end of the Bush presidency in 2008; it took a very determined Barack Obama’s bailout programme to rev the industrial machines back and restore the country back on the path of progress. Several other countries in Europe have at various times had slumps but have never had to devalue their currencies to the level they want the naira to be, not even Greece.

What have been the gains of the progressive devaluation of the naira over the years? We have had finance ministers who were bred and nurtured in Ivy League schools, took up top positions in the financial institutions and applied these palliatives wholesale to our economy without much to show for it; rather, the country is worse for it. All these show that the solution to our economic travails does not lie outside but within the country. What we are looking for in Sokoto can be found in our “sokoto (trousers)”, as we say in local parlance. Our solution lies in collectively taking our destiny in our hands at every level of government in the country. If we must ape any economic model at all, it should be the Asian Tigers – Singapore, Malaysia, South Korea or South American giant like Brazil. Western powers would always take more from us than they are prepared to give us. It didn’t start today but dates back several centuries to the time of our forefathers. Despite the fact that we need them, we must not fall hook, line, sinker to their gimmicks.

Devaluation impoverishes and worsens the plight of Nigerians and makes them poorer in relation to the citizens in the rest of the world. In plain terms, the take-home pay of the average person is shrunk; he pays more for goods and services. Not only that, he pays more for any goods he is importing into the country which is a vicious cycle. Salaries can never be increased in the same proportion as price level. At the time I was in the university, I could survive on a budget of N50 monthly but N50,000 is not enough now for a student.

The point is to develop the country’s export base and diversify the economy through revolutionized, purpose-driven agriculture and intense development of our abundant mineral resources. It offers a very lazy model to depend solely on oil. Every inch of the country’s land is so blessed that all it takes is to harness these earth’s resources. The days are long gone when politicians should see their opportunity as invitation to “come and eat” but as a chance to provide useful services and to develop the society for the good of all.

The good thing is that the country can navigate its way out of the present challenges. Nigeria is a very attractive country with rich natural resources, resilient people imbued with can-do indomitable spirit. A potential lender that insists on our devaluation is a bad friend and not needed. They can go to hell with their stinking funds. What is more, we have a ready market for goods and services and cheap labour. Very few countries have these God-given attributes. If we get our acts right, Nigeria will always attract genuine investments because the country is very important in the comity of nations and can afford to tell shylock lenders to go to hell. Even if we must borrow, let us do so with friendly financial institutions that offer favourable terms and not insist on naira devaluation.

Paul Ojenagbon