Economic Transformation: Nationalism And CBN As Game-changers

Posted on

Economic Transformation: Nationalism And CBN As Game-changers

| Leave a comment

When, in 1997, the financial crisis in Asia took a turn for the worse, virtually all countries in the region became frantic and rushed to accept loans from the International Monetary Fund (IMF) and the World Bank, with all the difficult conditionalities attached.

But one person chose to act differently. His name is Mahathir Mohamad, the prime-minister of Malaysia. He refused the loan and embarked on measures that made things tough for Malaysians in the short-run, but freed them from poverty in the long-run and forever. In concert with the Central Bank of Malaysia, Mohamad introduced capital controls and pegged the country’s currency to the dollar.

When, in his budget speech before the National Assembly last week, President Buhari asked that “Nigerians must be part of the growth story” of Nigeria, what readily came to my mind was how Mahathir embarked on a massive social re-orientation project that made all Malaysians, irrespective of political leanings, to join the government in developing the country in individual and collective ways. He introduced “Look-East,” a policy that made Malaysians patronise goods made in other counties only when they were not produced locally or in neighbouring countries.

Just as JP Morgan, the New York-based financial powerhouse angrily phased Nigeria out of its Government Bond Index for Emerging Markets (GBI-EM) four months ago largely as a result of currency control inevitably-introduced by the Central Bank of Nigeria, the West was outraged by the Malaysian intransigence and everyone looked forward to that country’s economy crumbling.

But no one reckoned with the visionary and resilient Mahathir Mohammad, and in no time, the self-made economic policies worked perfectly. Malaysia was transformed, and because he has institutionalised those policies, coupled with uncommon nationalism that was imbued in the citizens, the country has remained a strong economy that withstands shocks till date. Today, what has become known as Mahathir’s economic recovery model is being adopted by a countless number of countries to get out of the woods.

Fast forward to Nigeria: Could the same model work effectively in this country, where virtually every action of government is viewed by majority of the citizens from political and tribal perspective?

Firstly, the confidence President Muhammadu Buhari has continued to repose in the Godwin Emefiele-led Central Bank of Nigeria, must continue and even be strengthened. On at least two major occasions – 2016 budget presentation and the Presidential Media Chat recently – the president has expressed optimism in the ability of the CBN to retrieve Nigeria from the edge of the precipice economically speaking.

For a president that enjoys the confidence of the West, an exquisite balancing act can be employed to ensure that though this confidence is needed and shall be maintained, national interest is not compromised by any means. It is good that the president has aligned with the CBN in the correct belief that the naira shall not be further devalued – at least not at this point in time.

As Mahathir’s economic recovery model has proven, and after repeated failure of IMF-induced policies have failed to get us out of the woods, what is needed in our case is an economic recovery model that specifically suits our clime, our culture and sensibilities. By now, we need no economics professor to remind us that what serves the West so well may not necessarily serve Nigeria same way. Even though the West practices capitalist economy, the fact is many European countries, such as France, engage in some regulation of key aspects of their economy to suit their national purpose.

Secondly, a whole new culture is needed. A massive social re-orientation programme is needed to get all Nigerians to key into the Change Agenda of the Buhari administration. Nigerians must be made to realise that the solution to our problems lies in all of us, Nigerians, and not the government alone. A new sense of patriotism and nationalism must be imbued in all citizens.

For a president whose major attribute is personal integrity, this shall, ordinarily, not be difficult. But he has to do more to convince the opposition that he truly belongs to everybody and to nobody. If the opposition insists that the fight against corruption is one-sided and in favour of the ruling political party, the president must ignore his palace-courtiers telling him something else and personally investigate and determine all the facts and effect immediate adjustments.

If, for example, Sule Lamido, one of the highest-achieving governors of this generation could be tried in court for allegations totalling about N1 billion, there is no reason why another former governor of a neighbouring state, now a senator, should not be tried for failing to account for about N300 billion naira local government statutory allocations that passed through his hands, just because he is a member of the president’s ruling party.

On the other hand, the opposition must be made to realise that ceaseless, personal attacks against the president of the country is only counter-productive, even if their defence is that the ruling party did the same when it was in the opposition. Two wrongs never aggregate to right. A dispassionate opposition element could be appointed by President Buhari to lead this social re-orientation and nationalism-inducing drive. We must unite as Nigerians to fully be key parts of the Muhammadu Buhari economic recovery model, especially as poverty, unemployment, hunger and other vices do not know any political or tribal affiliation.

When the global plunge in oil prices hit the naira, the CBN sought initially to support it using external resources, but had to resort to market control as pressure persisted. The foreign exchange restrictions are indeed making Nigerians, especially the elite and their children, suffer. But the measures are meant to ensure a solid footing for Nigeria, economically. Already, it is serving in curbing our excessive appetite for foreign goods and help conserve our foreign reserves. Many countries have done exactly this to develop their economies.

Our medium of exchange shall always be the naira, not the dollar or any other foreign currency. In South Africa, for example, you can’t exchange the dollar for goods or services. You must transact with the Rand, their local currency. And they have no such thing as black market where currencies are exchanged in the streets, with all the attendant risks, as is obtained here. This is only done in banks and bureaus de change. The furniture we buy abroad is not as qualitative as the ones produced locally. Yet, we insist in the foreign ones just to boost our over-bloated ego and in so doing, exporting jobs and injuring ourselves. No responsible government will fold its hands and allow spurious imports of such unnecessary things as tooth-picks, razor-blades, etc. We shall encourage our housewives to be producing the soap and cream we use. Unless we do this, not a million Muhammadu Buhari or Godwin Emefiele can save us. They can only try in vain. We have to actively partner with them to help us.

It is disturbing that in these austere times, a state government in north-central Nigeria is spending N500 million on New Year and Christmas gifts for friends of the governor. Equally disturbing is the expenditure of over N500 million by a state in the south-east, purportedly to erect a Christmas tree, or the hundreds of millions of naira said to have been spent penultimate week by a state government in the north-west, purportedly on receiving members of the opposition into its fold. The federal government must have to view these acts of kleptomania, though committed by APC governors, as a negation of its avowed determination to lift the economy of Nigeria to a higher pedestal.

It is reassuring that under Emefiele, the CBN has since the advent of this Administration been concentrating on price, monetary and financial system stability. It now serves more as a financial catalyst in specific sectors of the economy, such as agriculture, all in an effort to create jobs on a massive scale, improve local food production and conserve scarce foreign reserves. We cannot continue to waste over N1 trillion on food importation, when we have been growing same. It just doesn’t add up.

It is also important that already, the president has expressed willingness to support the CBN in its innovative Anchor Borrowers Programme, aimed at lifting thousands of small farmers out of poverty and generating millions of jobs for unemployed Nigerians. The N220 billion earmarked for growth of Small and Medium Enterprises, coupled with a budget that is largely non-oil based, are very positive signals that we can look forward to a better and more-prosperous future, with every one of us as active collaborators.

— Gaya is the Vice President (North) of the Nigerian Guild of Editors.