A financial and business success strategist who is popular as a real estate investor now based in Port Harcourt says billions of dollars are waiting for Nigeria to get in if the right policies come on stream.
The expert, MY-ACE China, known as Mayor of Housing, said in a radio interview that investors were waiting at Nigeria’s financial gates, waiting to get vital information and statistics to make investment decisions.
China was speaking on how to make the Naira stable and what businesses should do in the face of a daily rise in prices. He said the investors want to know who is in charge of Nigeria’s monetary institutions, their body language, their background, etc. “Billions of Dollars are waiting but lack of trust is keeping them.”
The Mayor of Housing said the foreign reserve is another factor causing the crisis in Nigeria’s forex market. “For now, Nigeria’s external reserve bar is indicating two figures, something very bizarre. It had hovered at $39bn but now, it is reading two figures: $30bn and $17bn. Digital or internet information is what the global investment world follows. Two figures in existence are bad for the financial reputation of any country.”
He referred to the Guidotti-Greenspan Rule which is that a country’s reserves should equal short-term external debt (one year or less maturity).
“It says we should not borrow above our foreign reserve. That scares the people,” he said.
He also said the perception Nigeria gives out is that there are no ministers with portfolios. The country, he said, gives out poor policy communication.
“It is like rolling out a national football team without a Team Lineup. Nigeria is playing without a lineup. Who is the Minister of Trade, Economy, Works.”
The Mayor of Housing urged Nigeria to push its oil fortunes harder because non-oil export moved only 1.2 percent after so many years. “We should exploit our best opportunities in oil while we do non-oil. Our immediate saving grace is in the oil sector.”
He said Nigeria is at the moment politicising the affairs of the Central Bank of Nigeria (CBN). “Laws are not obeyed. The law that the CBN should submit audited reports yearly has been ignored for seven years but no institution of government said or did anything. The National Assembly that has oversight function kept mom.”
The guru said it is important to know what the common man can do now to help himself: “The answer is on producing for the outside market. Think of how to turn your products to export goods.
“Ngozi Okonjo-Iweala, Director-General of the World Trade Organisation (WTO) came to Nigeria to see how women products can join export. If Nigeria were fully productive, it would have covered up the need for forex arbitrage. About 60 per cent of agricultural products in Nigeria go rotten. Farmers don’t have the knowledge to process and preserve things. That’s why Ngozi came. Politics and oil have destroyed the economy.”
During the programme, calls came supporting his position. He said; “I appreciate the caller from Owerri, Morgan, the egg producer who has said this analyst is wonderful. I agree with him that even if you play the best world player in the wrong wing, the team will lose. So, ministerial nominations would need to come with portfolios so lawmakers can ask the right questions.
“Nominations without positions are useless for screening. I feel for him as an egg producer who can no longer sell because costs rise hourly. This has killed the market.
“My suggestion to business owners is to make sure your business is built around the blueprint. Get your books right. That’s the right place to start. Figures don’t lie.”
On the future of Nigeria’s economy, China said Naira can match the Dollar: The potential in Nigeria is huge. “Let CBN show control, let there be someone who is in control. FG should look for who has the image to sell Nigeria. The language of business is figures.
“Get the oil wells flowing again. For now, we pump some two mpd and export about 900,000bpd. There is no crude oil to cushion the forex shortage. The economic crisis is an opportunity to produce more and earn more. When the crisis is over, you reap.”
The financial success strategist said Nigerians must understand that market forces determine the prices of goods and services including fuel in any given economic entity. “This principle is true anywhere in the world. In Nigeria, it is foreign exchange (forex) that drives prices of fuel most.”
The issue before all elites, he stated, is to reason out how best to help the naira to become stable. “I suggest that the best brains can such as financial experts, analysts, business owners, and others can discuss this.
He enthused that the latest trends in the market indicate that the Naira got some strength against the Dollar on Wednesday, August 16, 2023. “It is understood that demand in the black market reduced and thus led to strength in Naira because they bought at N880 to sell at N910.
“It must be because of the signal or statement from the Federal Government that there is no plan to increase taxes. There were fears that taxes would be higher because the new FG had said they would not resort to borrowing.”
How news on ‘no tax increase’ calmed naira
As a business and financial success strategist, the Mayor of Housing gave insights into what led to the little spike in the Naira over the Dollar. “It was due to an emergency response by FG. Forex is about news and views in politics. Major pronouncements from the leadership lead to major shifts in forex. The announcement by the Government that there would be no increase in fuel prices led to the reduction Dollar rate to naira. The president also said fuel prices will not go up. This sent signals of some control is happening. It is because of the news of threats to manipulators. In economics, emotions are more impactful than tangibles.”
He decried the hint that federal schools would hike fees but commended the order for no such increases. “It is another statement that has an impact on the public. We call it Superlative of an already bad situation. In Nigeria, everything happens by road, the single form of logistics, unlike other economies where there are diversified logistics routes.
“Superlative of crisis means compounding of crisis. The common man may call it ‘Shege pro-max’, which means that an increase in fuel is ‘shege’, increase in education will lead to shege-pro-max.”
The truth, he pointed out, is that many families were going to school by the borderline, so, any additional increase of burden would take them to breaking point (shege Promax)
He also reacted to some agencies of government waking up in their duties. The Corporate Affairs Commission (CAC) is now listing almost 100,000 businesses that have not done filing in past 10 years. This has forced them to wake up to do filing and save their businesses. China said: “I see this as a positive development. Businesses should wake up and the government agencies should also wake up to their duties and responsibilities.
How naira can wake up
“I have three suggestions for the Naira to become stronger. One, if there is no evidence of somebody in control, there will be a loss of confidence in the forex market and there would be an exodus, and scarcity of forex. Thus, demand would outstrip supply. When control comes, confidence comes. It’s good they are cleaning up the list of companies and putting it in the news.”
He said transparency in government helps forex. The expert hailed the development whereby corporate bodies were now coming out to do what seemed right, saying people should not panic, and that the financial reporting is to protect the people.
He went on: “The most important issue in the financial market in Nigeria, for now, is the merging of all the windows (Parallel market, Importers/Exporters window) which are now a single rate. This week, scarcity of Dollars is the order of the day.
“CBN had said a few weeks ago there could be intervention policies, I call it control. Details are not out but many are asking what individuals and businesses can do. My response is; Dollar is accepted as an international currency. In 1989, the nature of money changed when then US President, Richard Nixon, pulled the Dollar off gold, meaning you can print it without gold backing. It is now the currency of goods and services.”
He said Nigeria’s foreign exchange management has seen arbitrage. “The new Government made a mistake. Every currency must be backed by goods and services. Stashing cash trashes cash, unless goods and services back it. Exchanges create value in cash through the currency of exchanges. World bodies know how to measure this.”
He said one government statement on May 29 caused the financial market to attract confidence and arrows went up. “But, soon after, nothing was seen to back this confidence up, thus, capital started flying out. Those flying out are going with Dollar.
“If Government had injected currency into the system, the confidence would have turned to something tangible. Also, the CBN ought to supply a statement of account every year but in seven years, this was not done, until just a few days ago when it was submitted to the National Assembly and the international community saw the naked truth, and that caused this panic you now see.”
Insisting there is arbitrage in the value of the Dollar, he said he appreciated all callers that revealed the pains in the SME community, especially Morgan Kaji from Owerri who said he doubted there would be sustainability of the Naira against the Dollar, fearing that more spending on the Dollar with less earning will aggravate the situation. “His deposition that only industrialisation can save this situation is apt.
“I must however state that there are three things that can help the naira: control, perception, and production. Baseline is production.”
On perception or trust, he said if external investors perceived that a lot of growth is coming to a country, they would rush into that country to become part of the flow and to gain in it, and this would cause forex to stabilise or increase.
He however pointed to what went wrong recently, saying the new FG came on stream to endanger trust. “It created a vacuum at the monetary policy headquarters of the economy, the CBN. Now, it is 70 days after, and no one person is seen as a point man at the CBN.
“Yes, an acting CBN Governor, but how many foreign investors will open their portfolio on a man in an acting capacity? They want to see and feel the main man on the seat, they want to read his body language, trace his economic policy background, and make fast decisions.”