For those who have been sending sarcastic video clip and lifted negative write-ups on Buhari’s Government in the last three or so month, I wish them, along with the more discerning others, a Very Happy Sallah. Especially to the recently embolden PDP orphans who have gotten some voice back, even though they are yet to find their souls and their senses. Life is now much tougher for the average Nigerians.
We have been predicting this for years, and we were shouted down by those milking the commonwealth assisted by their hired propagandists. We were following an economic dead-end but because most were benefiting from the looting and the lies, we deliberately ignored all the warning signs.
Let me refer the doomsday prophets to some piece I wrote on this page just some 8 month ago, as my way of answering the “Bring Back GoodLuck Group”. It was a reaction to Charles Soludo’s attempt to extricate himself from the mess, and paint himsef as a Messiah. (Abridged for space.)
The Professor met a model, a game really, and he did not change it. The CBN was swapping our dollars, from the sales of oil and gas, and giving us Naira to spend. It was selling the dollars to everyone who can afford it to purchase whatever they damn wished. We wasted the foreign exchange importing even things we could have produced at home: sugar, rice, wheat, fish, cooking oil, turkey wings and even industrial inputs and chemicals we were quite capable of sourcing locally. It did not require a rocket-scientist to understand that this was a non-sustainable model, which could only last with high oil and gas prices, or volumes. Once sales decline or prices collapse the CBN would find itself unable to meet our voracious appetite for imports, and the dollars to finance this. Which is the reality we are now faced with.
Over and above its shameful legacy of 16 years of corruption, criminal disregard for crumbling power and other infrastructure, and playing politics with Boko Haram insurgency, this single ineptitude of not preparing ourselves for the inevitable, ranks way up in PDP’s terrible record. Soludo, and Okonjo-Iweala (busy gallivanting all over the world patting herself on the back), should have advised Obasanjo and Jonathan to do thing differently so as to prepare the nation for the inevitable, since we all know the volatility of crude oil prices. There was a huge reserve of foreign currency and ample time to start reducing our imports of food, raw materials, machinery and spare-parts.
Our universities and hospitals could have been developed to reduce the vast amount of dollars we were wasting to go abroad for education or medical attention. On top of everything, without an iota of shame or respect for energy security and survival, we even started importing refined petroleum products. No, we had no wish to plan, and even opted to cripple the National Planning Commission. We were selling forex to every one Tom, Dick and Harry to import anything they wished, totally oblivious of our industrial, food and even social security, or the need to provide employment for our citizens.
Now that oil prices have collapsed, and forex supply is dwindling, we expect quick miracles from President Muhammadu Buhari. The unsavoury truth is simple; the party is over. The model was not sustainable. And the hangover will take time to clear.
Evidence shows that between April and June 2015 we imported over N140 billion Motor Spirit (petrol), N61 billion worth of wheat, spent N25.4 billion importing rice, N25.1 billion on raw sugar, N24 billion on frozen fish (cod and mackerel), N26.4 billion on motorcycles (including CKDs), N11.2 billion on crude palm oil, N11 billion importing powdered milk, all of which we could have produced or sourced locally. These are quite apart from the industrial chemicals, simple machines, implements and parts that we should have been producing locally to save foreign exchange and even export.More scandalous was our neglect of health and education. As a direct consequence we are now spending trillions abroad, creating jobs for others. Worse still, what we budget for our on public universities is much less than what the National Assembly spends on its members’ creature comfort.
While still on the service sector, it is worth noting that our commercial airlines, charter operators and the owners of the hundreds of privately owned jets around spend about N250 billion abroad annually on aircraft maintenance and simulator training of pilots. Many of them are government owned and yet we have given up on our own national venture, smugly stating that Nigerians cannot be trusted to run public enterprises while the private sector has been unable to seize the open opportunities. The maritime industry is even worse.
The demand for the US Dollar, the Euro, Pound Sterling and other hard currencies would keep increasing as long as we fail to take measures to restructure and diversify our economy. We must produce what we need locally whenever possible, and export more to the rest of the world to earn hard currencies. We need to develop our agriculture, solid minerals, machines and parts to feed our own industries and reduce import dependence. There seems no other way. Old economics, they say. But wait a second; who has ever done it differently?
The issues go beyond CBN fiddling with the exchange rate or allocating forex differently. Agriculture, Trade and Investment, Iron and Steel, Solid Minerals, Ministry of Finance all must put head together and work out an active, appropriate and workable industrial policy for us to increase forex earning, reduce excessive demand for imported goods and services, and move forward. Buhari did not create the problem, and real solutions will take time. The only requirement is that we move in the right direction.
Hopefully oil will remain cheap for the foreseeable future as more of Iran’s production get to the market. We would then realise that depending on government to provide forex is a joke that has gone too far. We may then begin to see the hides and skins, ginger, sesame seed, cotton, cocoa, rubber, gum Arabic, solid minerals, as well as other cash-crops and exportable products and services all around us. We may also begin to appreciate the need to build better schools and hospitals, as well as airlines and shipping lines. Education, training and research will hold the key while electricity, transport and ICT will provide the backbone. We squandered the reserves we should have used to restructure our economy, and missed a chance to be different. To get a strong currency we have to work harder, import less, produce locally and export more. By all means let them offer concrete solutions. But blaming PMB is just cheap shot. Nor can we go back to the bad ways of the last couple of decades.
In economics, very little happens by accident. Nothing is static and no policy succeeds “with immediate effect”. There are always time lags. We shall come back to these next week, God willing. But now, we must thank, and wish Happy Sallah to those who have contributed to making this Sallah peaceful, especially Buhari, Osinbajo, Tinubu, Buratai, Sadiq, Monguno, Magu, Shettima, and our two umpires – Jega and Mahmoud, and all those keeping hopes and faith alive.
And to my friends always complaining I have been out of touch this year. Kuyi Hakuri.
Credit: Sanusi Abubakar, Daily Trust
