• Pastor Ayoola Iyanapaja


    If you ask 90% of Nigerian today they will tell you Buhari is the cause of our economic woe and recession.

    But my question is this, all the oil producing country that are currently facing the same, even a country like Venezuela that is facing worse indescribably hunger now, is Buhari also their president?

    Many will reply let him do sth jooo

    I check my economic book I have not found the policy called “Do something ” as the solution to economic problem.

    How did we get here ? some said it was as a result of Bad economic manager and policy.

    I then ask : which manger and which policy?

    Some said ” the initial clamp down on Domiciliary account in a bid for the govt to fight corrupt money launderers. They claim this was the policy that discouraged the investors and made them move their capital out of the country.
    Can we say we are not aware of the fact that the looters mopped up the scarce dollar in the circulation to hide their loot in dollar bcs they are afraid Buhari may change the Naira, since he has no power over the dollar?
    My take is this:

    Do we have Domiciliary in the days when dollar equal 1 Naira?
    the answer is NO
    Many developed country of the world , do they allow Domiciliary account there : NO
    Those called investor we intend to encourage, since the policy have been reversed; have they flood in with their capital ? NO

    Why have they not?

    Some will say CONFIDENCE.

    We keep hinging our economic development on FDI (Foreign Direct Investment) which is good but how many of us will take our money and invest in a crumbling or recessed economy?

    Some said we are supposed to have devalue our money when we were told to do so by the IMF,

    And some local economist. said we need to devalue the Naira so as to close the gap btw the parallel market (Black market) and the official market (govt rate) which was N197 to about N300 by so doing we will allow price mechanism to regulate the market.

    But we told them Nigerian forex market cannot be control by price mechanism bcs we run a cabal free economy, an economy of greed being control by those that have access to Govt Dollar and have store it in their soak away. Who are now using the Aboki black market to manipulate the market, haven realizes the shortage in the central bank leading to their inability to stabilizing the market.

    Then we went ahead to devalue the Naira. But since we have done that, what we told them will happened was exactly where we found ourselves. Immediately the Naira was devalued, the Parallel market (black market) shifted the goal post and moved upward creating the distance gap again. I am bold to tell you that if we mistakenly devalue again as the pressure continue to come from some quarters, this economy will collapse. Because; for example, if the official market should move to N500 to a dollar, I am bold to tell you that the black market will move towards N1, 000 to a dollar.

    Some economist claim that when the Naira finally falls to its true value the investor will flood in en-mass.

    I say this:

    If the investors can bring their money when Naira is N160 to a dollar, how come they are not felling convenience now that Naira has lost its value especially in the parallel market to about 300% ?

    If what investor are waiting for is a total fall in the currency of an economy, I believe all the investors of the world should be in Venezuela by now that their currency is more or less a paper fallen to the ground. This is a country where as at November 28, 2016 a dollar was worth 3,480 bolivars (VEF or Bolivars is Venezuelans currency)

    The same economist will say hoo the investors are afraid of their worse economic situation. Then which investor will be bold to invest in a recessed economy when the value of our currency finally reach rock bottom when they are afraid to investing now?

    It is very clear that the reason the investors ran away in the first place was not because of domiciliary restriction or policy as many are claiming in some quarters, but the nose diving of our economy immediately the oil begin to slump in the international market and the warning of our formal finance minister that we are about to hit the rock, and the failure to save during the raining day. I remember OBJ warned the previous president about saving for the raining day and his reply was
    “We are already in the raining day”
    Okonjo Iweala:
    “We have serious challenges,” Finance Minister Ngozi Okonjo-Iweala said in an emailed statement. “Things have been tough since the beginning of the year and they are likely to remain so till the end of the year.”
    The borrowed money has been spent to cover overhead, including salaries, the minister said.
    Lawmakers in Africa’s biggest economy and oil producer last week passed a 4.49 trillion naira ($23 billion) budget for 2015, 3.2 percent lower than last year’s spending plans. It was forced to cut spending after global oil prices slumped.
    The budget took longer than usual getting through parliament, worsening the cash squeeze, because of the closely fought general elections in March, which saw incumbent President Goodluck Jonathan defeated.
    “As a result of the 50 percent decline in oil revenues, the country has faced a difficult cash crunch … Out of the 882 billion naira budgetary provision for borrowing, the government has borrowed 473 billion naira to meet up with recurrent expenditure,” the finance ministry said.
    Okonjo-Iweala had projected annual domestic borrowing last year would fall to below 500 billion naira from 577 billion naira in 2013.

    some economist claim it is a healthy decision, claiming the Naira have not achieved its true value, that is the reason we have the present big gap btw the black market and the official market. But they do not realize what we have is an artificial and monopolistic control. Though many may say the gap is as a result of balance of trade deficit i.e the low export to high import or our uncontrollable desire for foreign goods. We should remember that when we were having oil sale at $100 per barrel and a lot in our foreign reserve what we waste it over is the battle to stabilize the Naira by selling this money to black marketer through the fraudulent banker.

    According to a close BDC operator, a past CBN governor single-highhandedly own 25 BDCs. Recently The current central bank governor said we wasted 66 billion dollars on regulating the Forex market without building a single hospital or school or infrastructure from that money. What Sanusi said was what has been going on all this while, round tripping. One will buy the dollar at official rate of $305 and go to sell it at the black market rate of $480. What a lucrative criminal business? Even when the CBN sanction some bank for this illegal under deal, the market was affected the second week and Nigeria was all out to criticize the CBN and immediately the CBN reverse the sanction. The same goes when the FG attempted to stop feeding the BDC and the black market rate went up sharply. Nigerian cried out again and the govt reverse the decision.

    What do we really want?

    In other clime, policy are allowed to go through gestation period; and begin to yield the result, but in Nigeria, since we are not under military rule; we shout it down and the voodoo economist also cry out to say they are bad policy . And by so doing, it leads to policy somersault and flip-flop, and we are back to square one.

    Many of the brain behind these BDC and Aboki will do all they can to make sure the parallel market continue to reap all the gain the nation is supposed to reap in Forex and continue to hold the country at its jugular.

    How can you be fighting inflation that is caused by high cost of production and you refuse to lower lending rate? How do you intend to help the SME with high interest rate while in other clime interest rate is single digit? Our problem in this country have been the habit of choosing our CBN governor from the banking sector, who always come and maintain policy that will protect their constituency (the Banking sector) at the expense of the country well being.
    Emefele’s argument was that when he reduced the MPR rate (Monetary Policy Rate) early 2016 the bank misused it by borrowing the money to those that will quickly use it to buy consumer goods from china and return the money with interest quickly . The money was not directed to the industrialist who need it to import raw materials or to the SME. He also claim this money after it was collected from the banks, the borrowers took it to the forex market to purchase dollar by so doing it push up the value of dollar in the black market.
    In view of this, who is supposed to regulate these banks, is it not the CBN ?

    “The apex bank said it kept the interest rate high to attract foreign capital (forex) into the Nigerian economy to stimulate local production/economic activity, adding that a higher interest rate would be attractive enough to rake in needed investments to reflate the economy.

    The CBN’s permutations’ on the interest rate seemed not to have been sufficient incentive as the apex bank itself acknowledged the capital inflows were below expectation”

    What is the function of the banking sector in this economy? All they do is to keep our money and make cheep profit from short time petti trading, allocating millions to their directors and MDs. The CBN shield them including their self owned BDC at the detriment of the economy. They do not care if SME dies, they do not care if industries close up, they come with big knives to demand their outrageous Shylock accumulated interest.

    We should notice those financial analyst from bank sector will always tell you TSA is the cause of recession bcs there is no govt money for their lazy ones to profit from again.

    There is also a misconception when we hear TSA account has hit trillions, then we conclude why is the govt borrowing to fund budget? Money in the TSA belong to the MDAs. it is channeled into that account for accountability and monitoring.

    Which way to Go:

    This govt must maintain the current official currency value and institute a control on the black market, pegging it at a lower rate. This may sound odd, but we must know that the current black market rate is artificial, exploitative, round tripping encouraging and cartel driven. In other clime parallel market is always lower to official market and it is used to cater for low exchange like tourism not for capital good purchase.

    The govt must set up an office at the finance ministry which will take over the full control of the clearing of the letter of credit. I mean let the govt do the raw material importation for our industries and do the payment transfer to avoid the round tripping the industries do, claiming they use the dollar for raw material importation. Let that office take care of the payment on behalf of these companies and ship the good while they pick it at the port.

    This will stop the waste of the foreign exchange into the hand of fraudsters .

    Many of the companies in Nigeria are not economically viable to our economy , many of them are just here to use our economy to develop their mother nation economy. For instance, A company that import more than 60% of its raw material and now complaining of closing shop is not viable to this economy in the first place.

    As fast as possible we must begin to practice single digit low interest rate for the SMEs and growing enterprises. On the CBN What the CBN is doing cannot help the situation .

    While this is ongoing, we should begin to use the oil money to develop the other sector to fast track the diversification bcs we need oil money to diversify not paper. We must move quickly from the era of importation to the era of local production and massive exportation b4 we can be totally free from recession caused by crude price slump.

    As soon as possible our refinery must begin to work full capacity to stop the Forex waste at refined fuel importation.

    Something also baffles me the way we do things in this country. Parallel market rate is never published on their media in places like Us, UK or other developed economy but here our press are their town criers.

    If we decide to daily announce that a derica of rice is N500, how long will it encourage the sellers to adjust the price and also for the buyers to be deceived and accept?

    every Nigerian should know that there is no quick fix to this economy. We are just kick starting the economy to self reliance and if we fail to stop our taste for foreign goods we may still squander our hard earn foreign exchange to buy tooth pick and Brazilian hair and continue to blame Buhari .

    If by tomorrow Donald Trump announce that when he assumed office he will change the face of American Dollar……

    Dollar will equal N1 in a week bcs all those who hide it in soak away and in the underground, even the 20 billion dollar in bank domiciliary account as claimed by CBN governor which is being release to the aboki to make billion will panic and there will be excess dollar on the street of Nigeria begging for change to Naira to avoid the total loss.

    Compiled by past