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Nigeria-America: Naira versus Dollar analysis in retrospect
Nigeria-America: Naira versus Dollar analysis in retrospect by Apostle Dr. Genesis A. Dawuda
About 37 years ago, co-incidentally my birth year; Nigeria’s economic situation was not competing with American Dollar but with that of United Kingdom’s Pound sterling buying it at N2 to a £ 1.
Nigeria is a country blessed and also bedeviled by myriads of hydra-headed problems. Back in the days, when 65kobo was exchanged for a dollar, there was no such thing as brain-drain, human trafficking and what have you.
Back in those days, do you know that the government of U.A.E. came to Nigeria seeking for loan from Nigeria? I don’t need to write about Malaysia coming to Nigeria, consulted some of our best brains and even exported our own brand of palm trees from the nursery to improve their agricultural sector. Today I don’t need to tell you how strong that economy is today. Thousands of our children troop to their embassy to either go for studies or business pursuits for greener pastures. In the cause of doing that we’ve lost some due to unnatural causes.
Nigeria, a nation destined for greatness is still crawling on her fours. I’ll tell you why later.
Where was America in the early 70s on the lips of little kids? We didn’t know about America, we only knew so much of London, England and UK as registers for accomplishments and destinations for young dreamers. Why? Because our economy was stable. So stable that we needed no application for Visa to go somewhere like America to be ill-treated to the extent of being deported or questioned on the system of government we are practicing today.
In 1980, two years into the 2nd republic under President Shehu Shagari, Nigeria’s naira enjoyed the peak of her glory pegged at 55kobo in exchange for a dollar. Since that time, like the proverbial one-legged man who, out of the praise and applause accorded him for an excellent dance performance threw away the stick that supported him in the dance. Upon throwing away the stick, consequently he also lost the dance. Nigeria got so excited with a thriving second republic, she threw away the stick of prudence, the stick of the fear of God ( a common phrase of the late Sir Ahmadu Bello, Sardauna of Sokoto, “Basu da tsoron Allah?”) Our leadership also threw away the stick of Accountability. From that moment, the naira got a dent. Which led to the Buhari-Idiagbon coup with the then Brigadier Sani Abacha, while announcing the coup emphasized the Squander-maniac state of the toppled or ousted leadership of the 2nd Republic.
In 1981 61kobo exchanged for a dollar. 6kobo increment in the purchasing power of the currency to buy a dollar. In 1982 67kobo bought a dollar. In 1983 the naira fell again buying the dollar at 72 kobo.
On the re-entry of the military, thinking the country has come to roost. In 1984 about 76kobo exchanged for the dollar. In 1986 the naira nose-dived to N2.02kobo exchanging for a dollar. For this, IBB (General Ibrahim Badamasi Babangida, first military president in Nigeria) gave four reasons for that I think:
1. A decrease of our domestic production continues to increase.
2. Dependence on import for both consumer goods and raw materials for our industries.
3. A grossly unequal gap between the rich and the poor.
4. The large role played by the public sector in economic activity with hardly any concrete results to justify such a role.
Me thinks to this day we are still trying to confront these four “IBB Realities.” But when he stepped-aside, he left the naira down begging to rise at N22.33kobo in 1993, no thanks to him and his economic advisers. Could it be the reason he wants to return? To still confront his Four IBB Realities. In 1994 Abacha raised it to N21.89kobo sustained it at N21.89kobo until he died; thanks to Prof. Aluko his economic adviser,(not for Abacha’s death but for contributing immensely to the economy.) For five good years the naira was stubbornly pegged at N21.89kobo with all the sanctions and bans on Nigeria left right and center; yet, the naira survived it at N21.89kobo
Gen. Abdulsalam left it to Gen. Obasanjo at a crazy shot of N85.98kobo. At the end of OBJ’s 1st tenure the naira had reached and roamed between N127-130 Naira in exchange for a dollar. With all the wonderful travels and monies spent on Esther’s Coat, oh I mean on estacode yet the naira soared high not like an eagle but against all winning formulas that will make it strong. Upon his second entry the naira suffered another blow, exchanging for the dollar between N132-136. But in 2005 the government gave the naira a slight lift between N128.50kobo-131.80kobo.
Quoting IBB in August 27th 1985 “Events today indicate that most of the reasons which justified the military takeover of government from the civilians still persist.” I too after 25 years of that speech can see that the problems still persist.
The almighty Legislative Houses (Both Upper and Lower) needs to go ask Prof. Aluko, what magic did he do to peg the naira @ N21.89kobo for five good years consecutively. You may want to ask, why ask Aluko? Because he was the Chairman of Gen. Abacha’s National Economic Intelligence Committee. A man reputed to be second only to the late Dr. Okigbo on analyzing and managing of economic matters under different Governments in the past. Don’t you think he’ll do better in a democracy given the opportunity to perform better than he did under pressure? I can’t answer my question for the reader. You have your own say. It’s in the constitution.
Today you and I know that the naira is floating between N150-155. Nobody could stay it like Aluko. A man who once said we are an economically stupid nation; importing nearly everything, name it is it rice, or power or refined petroleum. Those who import generator will not allow NEPA or PHCN to work, neither will those importing rice allow mechanized agriculture to work, can you imagine the OBJ government voted N80Billion naira for the importation of rice? It he who warned against the “voodoo” economic system OBJ was concocting; warning that “the private sector-led economy, which OBJ was operating would lead the country into chaos and retrogression but he did not listen.” Probably I’m giving him too much praise here but then tell me what others did, because I don’t know. Yes! I mean I just don’t know. No man, they say has the monopoly of knowledge.
The man who couldn’t travel out (Abacha) pegged the naira at N21.89 and those who dined and wined with kings and Queens and paid courtesy visits across the globe(Globe-Trotting everywhere) estacoded, shook hands with very successful and powerful leaders around the world, came back the same and left the office, I mean the naira worst than they met it. Well a friend said Abacha’s N21.89kobo was not confronting any international market forces at that time with so many sanctions rammed and slammed at his government; that was why, and that Abacha stumbled on the windfall of the gulf-war when the price of crude jumped for good, that means God must be a Nigerian and Abacha-Aluko as his errand boys. Market forces or not Abacha left the price of Petrol at N17.00, established the PTF to channel the proceeds of subsidy withdrawal into critical social service areas. And the results of this initiative remain resounding eleven years after Abacha’s death, while ObJ shot it to N70.00 and no one knows where the proceeds were channeled into. So where did the proceeds of subsidy withdrawal go into during OBJ’s tenure? Did I here you say foreign investments? Yes it was invested into the air. It vanished into the thin air. Or into some people’s farm.
It was Prof. Aluko who gave the following analysis at conference 5th May 2001 hosted by Schiller Institute, Germany.
“In 1986, the IMF/World Bank succeeded in convincing the then Nigerian military government into adopting their Structural Adjustment Program. The Marketing Boards were disbanded; public enterprises were deregulated; government intervention in the economy became discredited; monetary and fiscal policies of government were relaxed, and the free traders took over the reins of government. The result was that cocoa production in Nigeria fell from about 400,000 tons a year in 1986 to 150,000 tons in 2000, and the production of cotton, groundnuts, hides and skin, rubber, and palm produce decreased to between 25% and 35% of the 1986 level. Coal production fell from 360,000 tons in 1980 to 19,000 tons in 2000. Per capita income of Nigerians fell from $760 per annum in 1985 to $360 in 2000. Food imports replaced food exports. The value of the naira, Nigeria's currency, fell from N1=$1 in 1985, to N115=$1 today, at the Central Bank exchange rate (Table 1).[FIGURE 11] Black marketing in the nation's currency began and grew since 1985, to become N140=$1 today.
He further added that, “The IMF/World Bank and their Western sponsors have now stated, with the approval of Nigeria's Central Bank, that the naira is even overvalued at the existing rate of exchange. The IMF has pencilled the naira at N550=$1 as its real market rate of exchange. Ghana, whose cedi was of the same value as the naira in 1980, now has the exchange rate of the cedi at 6,750 cedi=$1. Ditto in almost all the countries of Africa.”
Before Aluko will go to the great beyond and maybe meet his boss and tell him that “ they can’t stay the naira, not even for ‘four years’” I’m not eulogizing the military and near-despotic style of Abacha, I’m observing the honest and humble recognition of Prof. Aluko’s capacity to deliver by his late Boss. If you let this man die, I think both of them will go throw a party and tell the world of the dead that “the living can’t stay the naira yet we did it for five good years.” A word is enough for the wise.
I end with a quote from the amiable and distinguished octogenarian, Professor Sam Aluko,
Prof. Sam Aluko
“As one of the privileged Africans, who have had the benefit of education and close and sustained interaction with Europe and America, I lay the main blame on my own African peoples. First, the blame on my African ancestors who, for a little inducement of gunpowder, money, and materials, sold our young and vibrant Africans into slavery and colonialism, and now, for money, wealth, and power, continue to sell the conscience of the continent to the ideas, philosophies, and inducements of the West—to the extent that the whole of the African continent today owes the West and its finance capitalists, debts that are almost thrice the gross domestic wealth of the continent. Africa has reached the present lackluster morass because its leaders have always been blind followers of the West, which is why I have called Africa, the "follower continent."
When slavery was popular in the world, African leaders readily embraced it as a vehicle to wealth and power. When colonialism replaced slavery, African leaders readily pawned their kingdoms, dukedoms, and empires to the colonizing powers. When colonialism became discredited and communism/socialism/capitalism became the dominant competing ideologies in the West, African leaders readily embraced one variant or the other of communism, socialism, or capitalism. Now that communism and socialism have been virtually killed and exterminated by the West, epitomized by the U.S.A., and substituted with free trade, liberalization, deregulation, privatization, globalization, and other capitalist shibboleths, African leaders and governments have followed these "sing-songs" as their cardinal ideologies to economic development, political resorgimento, and resurgence..
Therefore, Nigeria, like Africa, must return to itself: find its own views; chart a different economic path from deregulation, privatization, globalization, and liberalization, and use its government as the main engine of growth through planning and control of its exchange rate, its rates of interest, and the pursuit of full employment for its citizens, by mobilizing both the public sector and subsidizing the private sector in that direction. Otherwise, the new slavery emerging in Nigeria will be worse than that of the 16th, 17th, and 18th centuries' slavery in Africa.”
Apostle Dr. Genesis A. Dawuda writes from Centre For World Rebirth, Jos Plateau State, Nigeria
Website: www.drgenesis.com
Email: info@drgenesis.com or centreforworldrebirth@yahoo.com
Phone: +2348028063695 | +2347027001527
