• Tuesday, April 23, 2024
businessday logo

BusinessDay

Simple economic sense, rather than endless debate and rhetoric

On the horizon

I said some days ago that we love endless debate and rhetorics in Nigeria. Everyone speaks on economics without deep knowledge of economics. We bring God into our disobedience and indiscipline to apply economic principles and standards for us while we do nothing but make noise. We talk without basis, foundation and knowledge. We take every discipline too simple to discuss with a wave of hand. If there is anything to be taken so seriously, it is economics now inviting individual experts to help guide our followers out of economic predicaments.

We think only the government will do it. We forget that microeconomics accumulates into macroeconomics. Economics affects all facets of life. The negative effects if poorly handled will affect even Bishop who prays 24/7 as happening right now. Economic calamity is not a respecter of anyone unless it is decisively averted. The negative consequences of a mismanaged economy have no respect for anyone irrespective of your status. We are all suffering from our lack of understanding, stubbornness and seriousness.

My economic perspective on import over export

I hope everyone at this moment is not interested in endless debate. The facts on the ground are sufficient to draw conclusions about our current economic miscalculations and misfortunes. What should be our economic indicators are the underlying assumptions upon which we anchor economic conclusions. These are pointers. Even simple mathematics tells us that 2-3 = -1. If export (e) is 2 and import (I) is 3, it means e is less than i. Simply put, exports are less than imports, which implies a negative balance of trade. Many should remember this from their elementary economics.

I think we should check our imports against the exports. It is not about the quantum process but the net effect.

Nigerian economy

From the available records, our imports are far greater than our exports. This gives us an unfavourable balance between trade and payment. By economic standards, we already know the effects that are currently affecting the country negatively and everyone therein.

To devalue your currency under whatever names and acronyms you give it, there are underlying assumptions you must also meet in order not to suffer negative consequences. The negative consequences we are facing in this country are that we are not net exporters of goods and services. Our economy is import-dependent. Hence the vulnerability of our economy.

For as long as these underlying assumptions are not met, which are your guides and yardsticks for taking actions, we continue bearing the negative consequences.

Endless debate will not help anyone. Rhetorics cannot solve any problem. What can help solve problems is the fulfilment of the underlying assumptions as opined by the proponents of any economic theory and principles we adopt or adapt.

Whether we adopt or adapt a theory or combination of theories, make sure we adhere to the underlying assumptions; otherwise, our exercise will be futile.

In our secondary school simple chemistry class, they told us that mixing oxygen with hydrogen would give us water. But mark you under specified conditions. All situations and conditions cannot give us this unless we meet the specified conditions and the required standards.

Conclusion

Be disciplined. Economic success calls for discipline and responsibilities. Don’t apply any theory or principle without adhering to its underlying assumptions. The end result is failure.

We overvalue simple economic mathematics. This is the reason for the imbalance of foreign trade, giving us negative economic misfortunes and a continuous rise in the dollar rate to the naira, thereby causing hyperinflation.

Read also: Managing the fallout of economic reform: the need for speed, integrity, and compassion

Sometimes, I listened to preachers of faith without work, and I asked them what Biblical James told the early Christians, “Faith without work is dead.” Do we need to tempt God for failing to work as expected of us, resulting in rhetoric and guessing theories whose hypotheses have not been tested or verified to meet any economic standard for solution? Failing to apply common sense? Failing to be disciplined and responsible? Failing to adhere to economic principles and underlying assumptions? Failing to allow experts to guide us and take us out of these economic misfortunes? Failing to recognise our limitations means that over the years, our assumptions have not led people out of abject poverty, joblessness, socio-economic and political crises, etc. Why are we so stubborn, like the prophet of bars, despite the facts of failures before us?

Can we give recognition to individual chosen fields and each operating within the armpit of his or her callings? We are wriggling in confusion and unnecessary pride, yet things are falling and getting out of hand.

Have we read about historic revolutions even in churches? What led to the protestant churches? What caused several sects within religions? What led several countries to break into smaller countries? What led to several civil wars? What led the Almighty Soviet Union to break?

It is simply insensitivity. Everyone needs to wake up to avert youths’ revolts, which can be unpredictable.

There is a mismatch. As a Certified and Chartered Accountant, in addition to being an economist, I can authoritatively tell us what the matching concept means. Be on the part of wisdom. Stay in your profession, speak within the context, and allow others to lead you. It is practically impossible to lead everyone in all professions and careers. Unless you are a seasoned administrator, you only coordinate professionals to do the actual work; hence, you fail if you assume the duty of doing the work you are not licensed to do. Be humble. You are limited. God never gave man omniscient power, knowing all things.

Have a nice day

David O. Oyetunji, PhD, MNIM, FCNA, FCSA, FCIMA, DE, JP