Nigeria is a praying nation. We need to pray more for Buhari and his administration. The last time, I submitted that there is no painless economic policy choice on the table for Nigeria at current low oil prices and at almost zero non-oil export earning, especially for a country that has wasted its previous oil windfall earnings. Therefore Nigerians need prayers.
Now that the administration has decided to float the Naira and appoint primary dealers for the single official foreign exchange market at the time, when the Central Bank of Nigeria remains the primary source of supply of dollars and the importations of goods have not abated, Nigeria needs prayers.
This CBN policy is audacious and laudable because it has gone towards liberalisation of foreign exchange market and it has also moved towards curtailing the opportunities for currency fraud.
However, it has indirectly devalued the currency by about forty (40) percent. This is in addition to the earlier policy to allow the selling price of fuel (PMS) to be cost reflective and the accompanying removal of fuel subsidies. These are strategic economic policies and strategy is simply about making difficult choices, we need to encourage and support him for his courage to confront the tough issues. Therefore, he needs our prayers much more.
The resultant effects of the above choices will be painful in the interim as Naira devalues, inflation continues to rise and the risk hedging mechanism, which is built into the new foreign exchange system means the Naira equivalent has to be provided upfront by the importers. This indirect mopping up of the Naira will make the interest rate and the cost of borrowing to go up. Naturally, CBN may want to raise interest rate to tame inflation, but this could impact negatively on the economy that needs growth to navigate its way out of economic recession. Tough time is here and definitely, the administration needs our prayers.
Nigeria economy has an unbounded space that defies many (if not all) economic theories, the reduction in importation is expected, after the devaluation of Naira but unfortunately, this may not materialize because the country lacks the capacity and the “will” to produce locally, finished goods or to process raw materials into industrial components. Local production is time-consuming for the rent-seeking Nigeria business men and it will prevent them from their usual capital flight. The President has made the clarion call by reminding the Nation that the era of free monies is gone. We need to work!!. Nigeria needs prayer to change our ways of doing businesses, to listen to the President and we need special prayer for God to raise economic enablers and not chronic capitalists to build this nation.
The revenues are still in crisis, as a result of the continuous sabotage by militants in the Niger Delta region, whose activities have resulted to a loss of about 700,000 barrels per day of oil at peak and at times, when the pipelines are restored, 200,000 barrels per day of oil loss. The President used the end of the muslim prayers to call for Nigerians to help talk to the militants and he asked Nigerians to pray. The militancy activity with the fall in oil prices since 2014, means the country is operating with a quarter or less of what it earned two years ago. This has been the situation until last month, when revenues available for sharing spiked above 500billion unlike in the previous twelve months. Although, the devaluation has helped the Naira available from sales of crude oil, the reality is that the spike was attributed mainly to the increase in income taxes and custom collection, usually experienced in June, July and August. An indication that Nigeria is not out of the wood yet and to plug the revenue gap, the country needs prayer for the helping hands of its allies abroad on the recovery of billions of dollars looted in the past, much of this now stashed in foreign banks and assets.
- Wale Bolorunduro, Ph.D, Developmental Finance Strategist, Former Head of Infrastructures and Power Sector, Zenith Bank Plc and Immediate Past Commissioner of Finance, Osun
Rev. Adesua’s book
With the fecundity espoused in his last two books, my former boss, Rev. Sam Adesua is indeed inspired. The excitement generated by his autobiography is however nothing compared to his new effort “the clock of man’s life.” I also figure a kind of telepathy in its spiritual communication. Readers simply connected with the few paragraphs quoted penultimate Sunday. From the day it was mentioned, readers have kept demanding copies. Finally, copies are now available at Tribune’s office, Motorways, Alausa. Those outside of Lagos will be linked directly with the Author. I couldn’t put it down.