Olusegun Aganga, Goldman Sachs outfit, and the Nigerian economy (II) c By Iroabuchi Onwuka

By Sampson Onwuka Iroabuchi

Nigerian interests rate differential with major economies of the world is not that certain, and comparison is not that easy to achieve and as such little can be expected by way of growth of the Nigerian unit of exchange; the Naira. Many Nigerians may or may not be aware that the nominal Inflation of the country is well over 12%, a percentage rate by itself a colossal disaster given the seriously nonexistent Hedge for the Nigerian Naira. The capital appreciation of businesses doing business in Nigeria is beyond available econometrics, and those seeking to introduce themselves in Nigeria cannot be counted upon as a tool for gauging investment rate. For that we can only expect internal restructure of Nigerian market dynamics as the only protective device and for financing the minimalist return rate in domestic market which is only Long Term reverting.



By this we mean that long term escape route in Nigeria is to be hijacked by International powers, for it seems that the IMF and World Bank are likely to assure that much of the continuous time profit from Nigerian Interest rate is soaked in the Nigerian debt repayment. The wider the gap between Nigeria and a Super Currency such as the US, the wider the percentage required to service the loans. The end result of this International indebtedness is the lack of alternative of financial institution, which is more than likely to lead to a choke in profit transfer. By that we lean too close to the probably theory of ‘sudden death’ syndrome of Nigerian Banking society, a very likely condition given the inevitability of non performing long term debt already evident in the country. Non performing debt as far as long foreign rates apply is a very likely scenario for Nigeria. Nigerian’s hedge and defensive strategy will gradually self destruct by ‘short waves’ of Inflations, a causality mainly due to International rates applying to Nigerian market directly and indirectly. These foreign rates, earn their way through any economy in the world and force its unit of exchange on such host, to undisputable degree that only cripple and clutch the Nigerian domestic unit of exchange.



Eventually Nigeria will pay a much huger price and will have to give up on any structured debt financing since the ‘actual’ rate - usually International in tedium - will like exceed the ‘conceptual’ rate of the economy which is usually Domestic. Short term note, Aganga’s appointment may be looked as an asset to the society but long term, this appointment of Aganga and his association with Gold Sachs outfit will damage domestic businesses. Judging from the perspective of a market research expert, I could say that the market factors currently available in Nigeria and the school of thought that Aganga is representing lead to one probable conclusion and one conclusion only, that Nigeria’s long term association with Goldman Sachs, World Bank, and IMF will not benefit Nigerian business society and economy. Whatever may be the interpretation for this elevation of the man Aganga, whatever may be the expected hedge for Nigerian Naira, we can be certain that Aganga’s promotion and decoration is not without consequences and reason, and his role as the polar tug of the Nigerian financial Cabal is not without International dragnet and puppetry.