A Rejoinder to Bayo Ogunmupe ‘Devaluation as disincentive to
Growth’ 9/1/2015 NGR Guardian.
By
Sampson Iroabuchi Maduachi Onwuka (Respondent)
New York.
Interruption.
I shall begin to discuss the left
and right of Bayo Ogunmupe’s article published by the Nigerian Guardian January
9th, 2015, by citing that what needed to be done to stabilize Nigerian currency
in the past few months have already been done and the consequences of the
depreciation is part of the economic evolution since at least 2008. The time he
is writing about is not specific and the specific problem of discourse did not
make to the essay. He is aware of the trials of Naira in the context of
deepening Crude prices, aware of categories of International market or
monotonic economy or one crop economy so tied to the dollars as if these
countries can measure up to US or toe the line of economic transformation that
we find available in these States since end of their civil wars within marking
distinction and interruption. Some of these standards are supportive of the
International Free market and world market, but are too expensive for a country
that is not honored in US or elsewhere. Nigeria as a manufacturing and
production hub is economically ahead of China and many BRIC economy such as
India. Why? These countries until lately were either socialist economy or
communist economies whose numbers were not international. India reason well
that it could not maintain the system that the British imposed on it given the
limited problems of fragmentation and renewed composition of a Country more
diverse than Europe and twice as large.
It is for this reason of failing
to maintain accurate control of the money houses in India and by consequence
China or to an extent Russia, ridiculed by the burden of many peoples of the
world that they looked to alternate political economic system, which as
cultural economic stages to free and capitalist economy. Nigeria like most West
Africa countries, entered Capitalism from what was left on their own country
and has struggled against the independence in the 40’s, 50’s, and in 1960 to
whip the country together. Then the issue of the Civil War between 1967 and
1970 may or may not have created more injuries than it solved. But at the edge
of the indecision of the 70’s was the new reality of Crude oil in 1975 which
was said to have the ability at sustaining the country.
We have failed to transfer the
import lessons of the Civil War to the economics of these days and in spite of
the debt related transformation and the age of communications which follow the
postindustrial society, Nigeria like most West African economies did not make
the transition, hoop lashed their way above the circumstances industrialization
and found itself a country that was lacking in structure to self-generate.
This is a prolegomena and has been
treated by better economics in severe academic inquiry into Nigerian industrial
past, including for the record on this case, the use of dummy variables after
Dick Fulley by Ernest Simeon Odior (2013). But as I argued against his basic
estimates which are leading but not sufficient that between fiscal policy and
monetary policy of any country is the general expansionary clause showing the
elastic constant and sufficiency of stress test by the actions of the Central
Bank in rolling back for instance some 300 billion Naira from circulation with
parallel and observable effects on the Nigeria economy. It is here that it
seems that devaluation of the currency was deliberate when perhaps it was not.
The crux of the essay is the issue of crude oil as the chief
item of National development, that the failure to allocate resources in Nigeria
to production following a decade of crude oil boom leading to a peak year of
$120 @ barrel may be the reason why the effects of the Crude oil which he
missed as primary reason for Naira depreciation could not be stopped. It is not
yet a free fall and it looks like citing supply of money as a defense
mechanism, to my view, the total issue of economic theory is in its defensive
and preceding dynamic roles. Defense through hedging against the reverse use of
a currency to US, defense in literal sense of contracting and expansionary and
in direct expense drive-in of foreign in-flow of local capital or foreign out
flow or sale or auction of super currency through, endeared overtime through a
trade banter to gold – no longer an affair with rise of International currency
basket – with French escaping the debase ridden parity to gold in 1931, an
argument for US dollars first made by Benjamin Strong preceding John Keynes
description of Gold as ‘old junk’, although Fisher and knight had more than a
thing to say about before Keynes. But it took the events of Bretton Woods to
invent international currency baskets after Keynes, a case that was forever put
to no use by role the dollar was playing in the world as late as 1968 and 1969,
than in the words of Paul Volcker, Charles Acker, and in Arthur Burns, the idea
had of removing the dollar from Gold had its day.
Allan Meltzer ‘History of the Federal Reserve;’ (2009),
treated this subject by adding the connection between US dollars to Gold and
how it compared and paralleled with International currency basket which was
useful on to the extent of US Gold holding and clearing house. With this new
measure, all dollars were redeemed by US and many nations including
International economies seeking to by-pass the savings-glut of international
currency and permeability of its currency quickly adjusted to dollars. It was
left to the devices of its governing dynamics who battled insurgency and large
scale genocide and instability to meet the fiscal policy and estimate from year
to year balance sheet. The funny lessons of these past decade at least with the
rise of crude oil which Nigeria and other International and third world
economies did not take advantage off is that expenditures, especially when
there are cases of surpluses are usually danger signal for poor and inefficient
economic adjustment. These countries with little restriction are well known all
over the world to be prone to excessive padding from foreign currency in the
name of foreign direct investment, the author opens up with the statement that,
“RECENTLY, the Central
Bank of Nigeria (CBN) devalued our currency, the naira from N155 to N184 to the United States dollar. This measure will certainly hurt the Nigerian economy. The announcement came a few days after the federal
government announced the introduction of austerity measures following the sharp
fall in the price of oil in the world market. In response to the devaluation,
inflation is galloping with petroleum scarcity ravaging parts of western Nigeria.”
We can begin by suggesting for that the current devaluation
of Nigerian Naira is not by design of the Central Bank of Naira and if Godwin
Emefiele is saying so, he is probably not sharing the real picture. The Crude
depreciation - even without interest rate appreciation and US Funds Rate - is
the direct reason why there is a depreciation of the Naira. Nigeria's failure
to expand its business elsewhere, especially with its Chief trade partner - the
US - is the main why there are no restrain on the free fall of the currency.
@48 an within 50, the crude oil is struggling and the excess and nearly
expensive idea of buying the Naira with the dollar to keep it from skidding
downwards can no longer be met. It is a long economic treaty, and here,
Ogunmupe analysis did not mention this very important theme of money market
economy, pushes the concern elsewhere and generalizes on the long term partial
solution which a thousand page analysis may not suffice.
“According to
the CBN, devaluation was arrived at in order to curb negative speculation with
the naira, particularly by the banks, which have been putting great pressure on
our legal tender. The devaluation, which is plummeting by the day, is now about
10 per cent. The step was rendered inevitable by excess liquidity in the banks.
In doing this, the CBN hopes to tighten the monetary policy
framework by allowing some flexibility in exchange rates.”
Economic incentive is not the same crude oil price decline
and the currency depreciation does not mean the economy is failing. But you are
in Russia and not a Russian economy. With the elasticity of money constant
without structures which defray unemployment through wage and price
comparative, you are likely in the manufacturing sector, you are supposed to be
a production house meeting the attention of the local economy, that squashing
along the competitive edge of the Free Market. Most BRICs are perpetuating the
level of sound economy Nigeria is attempting, and in my view finds itself in a
trap, not a liquid and quantity trap which control over money should achieve
during high capacity years such as the run up to the 2014, and should not help
to place some effective control over the money supply.
Here, with short bend on crude oil, there is further need to
look at US model, especially Q requirement of the System - although it borrows
from the margins of additional reserves - which is clearly from reserves and
must be learned to be borrowing - which Euro dodged by opting to exercise their
hedge and option elsewhere, Nigeria's lack of Gold resources and plummet of
materials outside those of crude oil, requires a kind of cushion, a creation of
money from thing air or nothing, to earn not only the stability of the currency
but purchase a discount for the future.
Fund's rate - even at a less than 1% shift in emphasis its
problem a just requirement for seeking a new wedding for Ghana and perhaps
South Africa. In some sense, scaling its interest rate with a nearest common
foreign denominator such as a Cedi or the Rand, as such place the emphasis on
the Cedi and current baskets in West Africa than the Euro and the Dollar of
higher and more demanding denominator, it should also help the inflation trap
the country discovers itself to thaw by offloading the gaps and inflationary
pressure to elsewhere such as Ghana and neighboring ECOWAS economy who are not
Nigerian economy and easily immune to it. Contraction of the money supply it’s
probably not the remedy at this point, case in point is themes of a Von Mises
on Phase II inflationary problem with respect to employment and money supply
away from quantity of money and phase I currency bias in which Friedman calls
MI and M2, in fact, the defining shift through a consumer based recreation of
money or its elasticity, may have a shift from private to banks a meeting
standard for M3.
“Devaluation will also
stop speculative practices; stop the evaporation of the naira. While we cannot
influence the increase in the price of oil, these CBN measures have been adopted without evaluating the impact on
the Nigerian economy. Indeed, the net impact of a
weak naira is an unsustainable spiral of inflation raising the costs of
petroleum products. Sadly, the improper management of the economy and fiscal
indiscipline over the years are responsible for the present anxiety. This is
all the more so, as oil price had remained far above the budget benchmark for
decades, peaking at about $120 per barrel earlier last year.”
Here, institutional appropriation of quantity of money is
left the benefit of big and investment banks, a case that should have saved the
Nigerian system dynamic by now had it been used for other things than the lack
of foresight and the limelight of seeing investment away from Nigeria and a
hedge for the purchasing power. The ability of financial institutions at a time
in the history of economy in steering its course through uncertain and
deepening crisis, is usually within the crass of M3, for there comes a time
when the power of the prevailing market must take a stand against the structure
on which the society and its economy is based. Does not mean an economy such as
Britain or specifically England with Banks return of investment and GDP three
to four times those of England is saved from the bifurcation with a
depreciating Gold for instance, or a depreciating commodity based cash crop
such as a Crude Oil; it matters that the end of a nation's ability to expand
and procure its Fiscal policies to the meeting ends of price controls, either
in investment through debt (bond) or through market these debts such as
monetizing it, redeems the asset class on these British economy and in our case
American Asset class from hints of corruption.
The situation is not dissimilar to the Nigerian case and
it’s entirely within the level of exposure of its Banks to exchange and partition
currencies as they see fit which is the same as profitable. That the routing financial
complexes take center stage in the M3 and Funds rate (intra-bank lending)
dominates interest rate and quantity money. It also leads from the shift from
losses in crude oil to something else without injuries to a significant portion
of its present market or the value of currency. Controlling the distribution of
currency in Nigeria is live and required financial engineering, but interest
rates at a high of 13% and overnight lending chugging along, is set to create a
stability pigeon hole but it is not the stability of the Banks that are stake
since it does not mean well with 300 Billion Naira withholding at the Central
Banks, but the problems of credit which shift from credit to quantity of money,
is to be well compared ideally and independently from rate to diffusion and
from diffusion away from quantity of money where as interest rate over 12% was
discouraging credit or attracting Nigerian Naira (Nairu - my doing) to Nigeria
from anywhere including Nigeria. It leaves us with other options, that the
motivation or athleticism to dollars or pounds or Euro is stifled with a
disbursement of nearly $200 billion, purchased at a heavy rate and may only
temporary require additional buying into the NSE to satisfy their new
partnership with institutional M3.
“Earlier, the volatility of oil prices was
long in evidence, but the Federal Government ignored the signals. Thus, the
government should be blamed for lack of creative problem solving in not
diversifying from our mono-cultural economy. Ordinarily, devaluation of the
naira would not have been a problem if we had plenty of goods to export and
little to import, since devaluation benefits exporters.
We can go for it to the extent that M3 has one major issue;
where to place the inflation which the state or a city or nation will have to
control when money shift more from private to major traders. I think any
argument in favor of buying Cedi or borrowing from Ghana through a direct and
their exclusive buying on Naira at a commissure rate excluding the higher
purchase of crib notes and cards for balance of traffic or investment between
Accra and Lagos - at even 200 billion with 10 billion monthly agility, may
create a gap for Naira against Cedi, may trap Nigeria in relational descent
over the next few months of foreign denominator and exchange in spite of what
may happen to the Crude oil, may leave Nigeria a no show for international
market but in the end, it will serve its purpose of defraying the currency
cascade and currency depreciation that is more than likely to continue in
Nigeria with US acting from even 2% Fund’s Rate or higher….
“Now we are worse of
as we shall need more naira to buy goods sold in dollars. Unfortunately, Nigeria cannot manufacture much, owing to a combination of factors among
which are high cost of production, high interest rates and an unstable power
supply, which have hampered local industries. Interestingly, the finance minister
opined that the interest of the common man is a priority in Federal Government's strategy for salvaging Nigeria's economy. We urge the government to clearly demonstrate this through
clearly defined programmes and policies that would cushion the people from the
effects of devaluation of the naira. Perhaps devaluation and the ensuing
austerity measures would have been a blessing in disguise if it would force
government to develop other revenue sources, establish fiscal discipline, cut
cost of governance and establish an interest free, collateral free and
discrimination free bank product to develop the country.
“The second
disincentive to economic growth is the abdication of leadership. By this we
mean that the people in power have refused to enforce and enthrone regulations,
which can ensure economic growth; the overbearing attitude of our regulators,
which culminates in poor attitude to work and abdication of authority and
refusal to apprehend regulation violators.
The second alternative should be looking to end the current
Dutch system in Nigeria, revert to the statuesque given the new economy that is
developing from the old. The idea of privatization is nowhere confined to
Nigeria and has been expected to should lead to better productive economy but
at the price inaccessible to many Nigerians (150-168 to a dollar) and even big
production house who turned to cheaper or supposedly cheaper alternative such
as Asia brand and China, there is no where we can close the gap on Nigerian
economy and the levels of economy demands – especially in energy which Olusegun
Aganga has taught us all the lessons of confidence game and economic czarism,
but have failed to deliver the more pressure demand of energy through a direct
means to an end introduction of metal separating Nuclear energy, which usually
takes at least 3 years and are made to fit for even West Africa with a balance
sheet of $20 Billon which most West African Countries can’t afford but its
guaranteed by the US Energy Institute. The failure of this effective
distributive source of energy for even the least production of medical supplies
means a direct to market penetration of goods from any part of the world to
Nigeria for Nigeria to stay alive.
In essence, the promissory notes of crude oil stability that
OPEC has little or no power to deal with suggest a questionable ending which
the circumstances of the Shale Oil and its miracle drilling from any in the US,
should help guarantee, that spanking the crude oil to submit below $48 @barrel
was sending export ridden economies to the board room or import expletive
economies such as Nigeria to the theater of change. We compare all of the above
mechanics to the temporary issue of the Nigerian current exchange rate, which
at 168 to the dollar is showing signs of debasement, which the payment or debt
recovery means is not so much achievable and hence a further depression unless
we monetize out interest with a future option and adjustment to Ghana even at
2% preferred consideration for the returning number of years, inducing Ghana in
my view to buy enough Naira is callable and protected bond, that should be
debentured at the similar rate of interest current rate with or without
discount. In so far as these areas are not taken seriously, we may look at the
item of hope that a shift in OPEC capacity or use of Shale means to open and
frack Saudi Arabia may signal an end to the trading block given the new and
easier way of achieving crude and done oil.
According to Bayo Ogunmupe, there are cases of taxes and
government actions which mitigate against the progress of the business men and
women, that,
“Besides, most of the
policies churned out by the regulatory bodies in Nigeria have over the years effectively succeeded in stifling or
restricting and hindering innovation and investment. This has led to a situation
where the bureaucracy dictates the pace of the growth of the economy. Another
worrying issue is double taxation whereby entrepreneurs are being squeezed by
multiple taxes, levies, red tape as states seek to shore up their internally
generated revenues. This is why the World Bank observed that Nigerian businesses spend valuable time and resources trying to comply
with a myriad of local regulations”
Whereas his statement about taxes, levies and red tape, did
not mention all the money existing anywhere in Lagos, where much of the taxes
is spent in Lagos and mainly Lagos and in parts of the West.
In this case, a collective bargaining also of the remnant of
the West African ECOWAS economies may put a few words on how they subscript for
Nigerian foreign exchange, which if and should the Barrel up to 60 or close
must in view act quickly enough in re-denominating its currency. We may argue
that the economic balance sheet stated between Ghana, South Africa and Nigeria,
is a way on encouraging participation of other satellite in Africa to perform
their due diligence in encouraging competitive advantage and rating between the
Africa countries and more than one economy, between its regional balance sheet
and swaths, such as a stability away from being rated internationally can be
achievable through exposed any country in Africa is to another and not
necessarily the opulence and poor market strategy that measures say Nigerian
and its crude based currencies to US and other Foreign currencies. What US
needs a challenge and not another cheap currency for instance Naira (Nairu)
that offers no resistance whatsoever? If there are cases that inviolate the
trade banter between Nigeria and US – with or without – currency rate, it is
through the use and abuse of its currency exchange, that Nigeria can offer some
relief a US market is mainly due to its foreign exchange and perhaps crude oil.
“As World Bank said further, removing those burdensome regulations is an
essential step towards a stronger private sector of the Nigerian economy. After sampling the opinions of world-renowned economists, we
have come to the conclusion that the key to unveiling the troubles of the Nigerian economy is to be found in recognizing that the rebased economy
has highlighted the absence of structures in our economic policy making. This
means that there should be an immediate transformation from primary to
domesticated value added production.
In normal light, a fancy look at the crude oil prices which
has little or no future should revert to the more serious contagious issue of
currency exchange and buying power. Re-dominating Naira at this period is
sending wrong message, it should have been done when the price of crude oil was
up as a hedge against the rainy days as these when the prices are descending.
If we climb with easy does not easily follow we descent as fast, but it
measures the rates of descent which is far more complex and velocity driven
than the poor acceleration due to gravity of money supply or in banking
self-supporting gravity of money for M3 and for Banks and their degree of
penetration, locally and elsewhere.
“Although reports suggest that countries like Thailand, and Malaysia have experienced similar growth in the
services sector, but that this in itself does not justify the composition of
our Gross Domestic Product (GDP) that our rebased economy just revealed.
However, world economies are measured by the strength of their industrial
capabilities, which give verve to the service sector. If the service sector has
revealed an uninspiring contribution of a mere seven per cent, it means that
retail trade is driven by imports. This implies that the services sector put a
lot of pressure on the exchange rate of the naira.
Although contraction in this case is not achievable through
shifting money from public to private through Government placement of Naira
held bond. But if the measure of the final accounts for foreign exchange such
dollars and pounds are consider similar quantity as final product - like any
other product imported to Nigeria, the Naira depreciation is shifting money
from private to big entrepreneur and Banks trading above other Banks and
perhaps not the other way round. The next level is a credit squeeze due to poor
rate of returns or negative return rates, then Asset bubbles and you are in
depression. There is no economic resistance even with the paper fortune of
Europe and currency, the only discount could only possible if Jonathan is
willing to borrow from private directly and hope crude oil appreciates to $60
by the end of the year 2015. Ogunmupe
continued his theories to GDP, which is here a spent argument but makes a
headline interesting measures are taken in business but,
“However, all over the
world, economies are measured by the strength of their industries, which gives
verve to the services sector. In Nigeria, the services sector is dominated by wholesale and retail trade. If
our manufactures contribute seven per cent to the GDP, it means our retail
trade is driven by imports. This puts a lot of pressure on the foreign exchange
rates. Given that our earnings from oil are plummeting, the demand for foreign
exchange to sustain our imports can only come from running down our external
reserves.”
US is an opportunity that Nigeria is blowing like smoke, to
the point that the country is generally deserving of the treatment it meets
with other nations of the world. Consider that after losing many Nigerian lives
and soldiers in Africa Military led peach efforts and illegally conceding an
oil portion of their country to Cameroons and some profligate foreign criminals
and Crude oil tycoons who are drilling these places for Crude oil unfettered
from these Nigerians and Cameroons, that Nigeria saving Liberia, Sierre-leone
and seeing that Charles Taylor received useful and documented military trial,
including their functional roles in forcing both UK and USA to release Mandela,
breaching the gaps in Congo and so on, is not recognized by the United Nations
permanent Security Members, many of whom have not done nearly half in managing
regional peace and conflict.
Nigeria was opposed by surprisingly many countries are a
member of the UN Permanent peace keeping and security member nations, including
Germany of all, especially Germany that would have convinced us that they were
very liberal. Do these nations entertain any hopes of destabilizing Nigeria or
colonizing it? The answer has no merit whatsoever for Nigerians for a start, we
may compare the dismissal tendencies of these nations and many other countries
in which Nigerians and other Africans find their home, as a receipt from some
of these assumptions with Nigeria for a start and their complete or nearly
complete ineptitude on what they should have started to accomplish in US and in
Europe since 1900.
There are cases of accounting standards and why there is an
issue of corruption, this happens when there are cases of corruption in US and
elsewhere. Nigerians are known to have difficulty keeping a good business
straight, largely due to the problems they experience in US and elsewhere. But
this is not always the case, there are cases of Nigerians in high call areas of
American economic community who are working with others towards improving a
career discipline. But the ultimate idea of moving from Africa to United States
is not to have your business licenses confiscated by some judge over some
business which is not clear or have some irrelevant low court bar you from
traveling even with your attorney’s present leading to damages to private and
personal businesses that couldn’t have imagined. This means that the growth of
American as a business network and empire is one that allows the likes of these
Nigerians with some interest in balancing their economy among others to have
sown some seeds of intra bank and international development over the years. If
the questions of corruption arises as they do elsewhere, the advantage of
having US financial institution over the last two centuries should mean that
adequate public interest without the dangerous secret maneuvers to steal these
financial lending trees and Banks in US.
Should they advertise their interest in UK, these resources
bound Nigerians may have benefitted from using UK to increase their penetration
into Europe, should not have limited their resource base to one or few banks,
but as in regional banking, placing some faith in US, UK, and parts of Europe
such as France would have staged a survival of Nigerian or African economy in
times like this, both for balancing the currency and for prized interest in Asia
such as China when they needed.
Reading a portion of Chimamanda Adiche’s ‘Americana’ (2013)
gives you an impression that Nigerians in US from in Taxi business to the
Medical Residence are already cornered by their accent and job description that
only these Africans are victims of profiling. In one of the It will be
difficult to do something else as a Nigerian who is not in Education or in US
based foundation even with 80% level of US service jobs. The lessons from
medical resources available in the US and in more than enough to push the
limits of the life style of these Nigerians. But having no foreign funded
locally credited structures In the United States makes the profession a dead
exercise.
There is a large presence of Nigerians in Asia countries such
as China, many if not all of them as self-supported, ferry goods and services
from any part of Asia to other parts of Asia, ferry goods and services to
United States especially in New Jersey and New York with cheap China products
on the garment industries and around Canal street, or from Asia they ferry
goods into Europe until they injury to the business after 1999 due to embargo
placed on Asia products. The more reliable pathway is Nigeria via China or in
recent time Vietnam, Nigeria via Taiwan and Hong Kung, and from these areas
they are joined by Cameroons and South Africans – especially White South
Africans who literally handed all the business connection to dictate to these
Africans – and with other Africans, they maintain a continues injections of
materials from Asia into Africa. No doubt that over time, some of the
traditional pathways will be called into question like the case of the Carpet
and fabric, once a product of the mainland China and the rest of the Africa,
are discontinued due to new industries in West Africa that attempt to emphasize
local production of fabric with chemical raw materials from Ghana or Nigeria to
boost.
In this case, unlike other cases such as engines of
productions, there is a case of relief which in primary levels is not important
since Nigeria is not a production hob, may have at some point in their own
existence been considered a metallurgical industrial sub-Saharan African like
the Bantu whose metal workers in Southeast Nigerian and Northern Cameroon were
claimed to have reached the East and the South of Africa. Beads production
houses also in South East and South-South Nigerians are discovered in their
hundreds of thousands among the Igbos and the Bini, as with the Akans and
Ashanti that are also known to have manufactured pure precious metals such as
Gold, would emphasize the importance of business penetration of other West
African Kingdoms until the coming of the Europeans in the 18th and 19th
centuries. In setting a new standard for the development of business and
agriculture, the author compares Agricultural schemes in Nigeria without the
examples of Kwara and South African White farmers from Mozambique many of whom
have since returned to Mozambique, but in his estimates, Ogunmupe indicated
that,
“Thus, the federal government should recognize the danger so posed and
diversify quickly to forestall an outright collapse of the naira. In this
regard, Federal Government has to plug distribution loopholes in
its Agricultural
Transformation Action Plan. It is
noteworthy that both manufacturing and agriculture output have remained
stagnant. The urgent step required is collaboration for increased productivity
between the federal ministries of Agriculture and
Industries, particularly in areas
of private sector investment.”
Productive capabilities of West African nations are no match
for the Northern African, especially those who lived along the Nile. The only
reason why there is a brief material case of comparative is that these markets
for instance in Nigeria and the idea of metal production which people claim to
have come down from others, is one old market, suggesting that Africa like Asia
especially China and India as in this Nigeria and other African countries were
caught unawares and napping. The prize has been paid, including the age of
Slave trading which forced a lot of people out of the country. In the
circumstance, the problems of having Nigerians and others lose their respect to
some country from Europe who in the last 100 years had proved themselves in war
and so on is due to the failure of these Africans and Nigerians from taking
advantage of the opportunity that common market avails to them. At the rate
Nigeria is squandering their business opportunity suggest that either the
country in question is hoping to perpetually strike beside others in all
classes of respect and decorum or that they expect to growth economy through a
form of debasement. Ogunmupe concludes that,
“Indeed, the best ways
to strengthen the value of the naira are one, expand the volume of non-oil
exports and services and two, enhance domestic competitiveness that will reduce
the demand for imported goods and services: because a pound saved is a pound
earned. Howbeit, we have to expand our manufacturing sector because as long as our
industries remain stagnant, for that long would unemployment remain a threat to
economic development in our fatherland.”
A classic example of some kind of debasement is the future
business of the current Executive director of Nigerian Stock Exchange Oscar
Onyema in handling additional call for investment in the NSE when the exchange
is already overweight. You can only dream on a flash in the investment pan if
you are looking to improve you economy through a veritable estimate of Arthur
Okun’s 1% rise of inflation to 1% condensed GDP appreciation. In some measure,
the expansion of Nigeria and in fact Ghana for comparative sake, is an
appreciation from inflation not a normal real growth, that a growth of 7%
Nigeria is based primarily on its inflationary curve and pressure, fact is that
the country is struggling in spite of the numbers it is crunching out, that
further expansion on the Nigerian economy is in many ways than a matter of
inflation, either core or derived from the CPI numbers consisting mainly 5% or
less or total control money economy. Promoting Nigeria as a viable business
destination is within the replacement strategy of creating additional loss of
Governmental control to over-sea based businesses that we can narrate from
other parts of the country’s stock of real exchange, that the total amount of
resources available to these Nigerians from all raw materials are not meeting
standards from a progressive International economy. The main event would be the
crude oil, whose life is not caught between a ‘hard place and a rock’.
Put it differently, that the market structure of Nigeria is
older than the foundations of United States as a country, that these
intra-township market links are still visible for almost 400 years and
sometimes more, than the God of Iron that brought melting to Yoruba and Ijaw
called Oliseh or Olisah is in a long line of Igbo history and a quasi-Igbo of
Benue, Kwara, and what was called Bendel Igbo, equally an attribute of God or
from God, that the Oduduwa referring to the coming of some outsiders to Yoruba
who defeated the mask-wearing ‘Alagbara’ (Igboid group-Igbo Ukwu) out of whom
the name Yoruba (Oba’s servants) was derived from these people, and were Iron
workers, meaning that these market suffer from poor local and international
strategy but has been in existence, that the transformation of the Nigerian
markets is not in current an International see only, it requires a
transitioning of small business from nothing to something and leeway into the
Stock Market as a way to generalize and publicize their accounting, only then
can expansion of the NSE would not revert to debasing of the Naira. In the
event that we look at the idea of Foreign Direct Investment in Nigeria, it
looks likely that the hope of making this happen in US here begins with what
other developing countries have done in US, that France, London, Japan and
latterly China are Americans biggest business ventures partners and have a mast
of financial foundations and groups, a mast of business groups such as Banks
and Banking institutions that enabled these countries to enhance their staying
power in the United States and simultaneously in Europe.
The open market manages by either Nigeria or Ghana in this
case, is such that they deserve more for supporting world markets more than
half Europe or even United States let alone China is enjoying. Nigeria toe the
free market line from day one and has been a victim by its own choosing of
international dumping and foreign investment interest. A rule of comparative
advantage between Nigeria and the rest of Europe, will point that majority of
European countries are well ahead of these Nigerians. This is in fact the case
only to the extent that total amount of Nigerians (170 million) is nearly two
fifth of all Europe, means that there are more mouths per country to country to
feed as there no European country with over 120 million people. It leads that the weight of resources that
circulate in Nigeria is a thrift sum compared to what is available to them
through their own oversea and in land business exposures. The only way to help
these Nigerians help themselves and in the end help their respective nations
which these European countries are doing is to have Nigerian financial
institutions posed after the general but advocated and independent financial
institutions in these United States and in Europe. No great commission is
needed to demonstrate the profit of South African economic agenda for US and
its Global Initiative, than the biggest banks in Africa are easily South
African and operate free from the Government. Either the current crop of these
Nigerians and financial leaders are not used to trusting others and themselves
to be selling only a Billion over the Stock bound bond market which was called
up in one hours of meeting the market, than the possibility of really
connecting to US through a demarcation of 25% earned resources from Crude Oil
and from other business banter between Nigeria and United States.
It is my view, that all African countries should have at
least by now account for at least account for banks that are self-supporting,
with gravity of currency schools capable to weeding through the securities
laden American market necessary to be part of Federal Reserve of a local
network such New York Federal Reserve. In the case of advertising their
investment options, the Maryland and Baltimore securities dealers with the
Federal Reserve are mainly insurance based and contain a few African American
owned financial institutions, but from the histories of both Continents of North
American and Africa, there should at least be now several securities from
Africa and more than two from leading economic communities in Africa; Nigeria,
South Africa, Egypt, Morocco*, Libya, and others such Ghana, to have a staying
presence in each of the securities dealing Federal Reserves throughout the US
and in UK for a Start. Such business venture like those of BAFTA, CAFTA, or
NAFTA, with the edging up of the Banks and financial institutions have a thing
or two about the FOMC which Nigerians thanks to free network resources are
following on daily basis, that the number of even African American businesses
present in these areas of interest would not survive more pressure saving these
invested interest from Africa and Caribbean make their presence known and
ruthlessness for business and accounting also known.
