Nigeria is in double jeopardy, afflicted with the twin evil of falling oil prices and falling reserves. Nigerians should start getting ready to face the music. Recently, the Finance Minister insisted in her guarded public pronouncements that Nigeria is not broke. But fortunately, the facts are there for everyone to see. No one can bamboozle us with fuzzy math. Nigeria is broke! One of the reasons Nigeria has found itself in this hole is because the drivers in their various capacities have embraced fraudulently consistent ideals over facts. Thankfully, facts are facts; and facts are sacred. They are a better alternative to the informed rhetoric from the mouths of political opportunists and partisan scolds.
In addition to declining fortunes, unfortunately, Nigeria through the boom years did not develop any enviable ideal. Within the country space, good citizens are outnumbered by religious hacks, bare chested thugs and common thieves and all hues of common criminals united in their mission of defining Nigeria in their own image. They have no respect for humanity. Within the polity, the two political parties have no ideological basis and sad enough, the country has no receptacle for philosophy. With the stew of shame complete, Nigeria has the complete bonafides of a rudderless nation and a nation in a vacuum. The time to pay for years of indiscretions is here. The punishment will be served on a decorated platter, but it is a punishment all the same.
If Nigerians want a quick reprieve from these certain punishments, the brass tasks required to build Nigeria from ground up after 2015, if Nigeria survives, will be daunting. It transcends the empty assurances of Okonjo-Iweala, it surpasses the off-the-cuff remarks by Jonathan’s loyal cutthroats and the rabid brickbat of Abati. What is at play now is that the world has served us notice on all fronts that it will not accommodate any economic shortsightedness on the part of any serious player nor will it tolerate ill-defined or unfocused economic policy without serious consequences. Nigeria’s collective incapability or incapacitation has turned into an embarrassing joke.
In a few months, we will begin to see how the total reliance on crude oil has been a recipe for disaster. What blueprint have we developed, implemented and validated on other sectors of the economy that needs to be explored? What are the strategies for extensive and transparent private participation in the economy? Is the environment safe, stable and conducive to attract foreign direct investment? Is the government morally and politically ready to fight corruption? These are no easy tasks, because the problem is more deep-seated than we can ever imagine – we are in financial doldrums.
The first step in fixing Nigeria is to define a learning culture for the country as a way of exorcizing the demons and cleansing the psyche of its population. After which the country must embark on aggressive infrastructural development, power generation and distribution, public accountability and probity for office holders as means to increasing productive capacity, productivity and economic development.
For the next President to be efficient and effective, he should not seek to be popular especially on the economic front because of the widespread distortions and malfunctions within the economy.
Nigeria is in very bad shape. The country needs a leader who will take the bull by the horn and do what is right and good for all. The coming months will get progressively painful as the Naira faces severe financial crunch and pressure, delayed salaries in public service, unpaid local contractors, among many more discomforts. It is time for the bitter pill. The level of decay of our scanty public infrastructure and the pressure of sustaining a reasonable exchange rate is a source for concern. This will not be made easy by the continuing fall in oil prices a trend that will continue.
For how long can the CBN support the Naira? In the past, trade flows seems to be the major determinant of currency flows and hence the exchange rate. Now, currency flows are working independently of trade, and are setting the values of currencies to each other. Exchange rates have started determining the levels of trade. With these shifts, governments can no longer counteract these with monetary policies of old. When this is done as in the past 10 years, currency flows will outnumber trade flows by at least 100:1.
Since the 1990’s, private sector financial flow continues to outnumber what any government can ever dream to marshal, a fact Nigeria needs to appreciate for genuine economic reform and growth to take place.
This will also aid in weaning the country of total dependence on oil revenue, which appears the only way of ensuring the political stability of the entity called Nigeria. Most lovers of Nigeria are lovers of oil. With less reliance on oil, we are more likely to live together with respect and without suspicion.
Beyond 2015, the government should cultivate genuine appreciation for technological know how and transfer. The reality that the domestic economy of any nation is vulnerable to global shifts and changes should have dawned on everyone by the 2007/2008 financial crisis. The political control and manipulation of the economy is fast losing its grip among nations. Nigeria can no longer restrict global trade and financial flows by erecting barriers, charging tariffs, quotas or other import regulations, because international and trade agreements are fast making a joke of such tools. The global economy is fast changing the definition of sovereignty and extraterritoriality. Given the rot in the system, can any real reform take place?
The first task lies in the motivation of the people. Whoever assumes the Presidency, must envision new plans, formulate strategies and change the way things are done in Nigeria. There must be a demonstrated attempt for Nigeria to seek back its place from within and without by obtaining and maintaining economic, political and moral leadership through innovation and an alert adaptation to the changing world environment. Nigerians want their country back and they want a renewed sense of worth and a new Nigeria we will all be proud of.
Bamidele Ademola-Olateju via twitter: @olufunmilayo.