By Sulaiman Salawudeen
One fact of naira’s chronic ill-health is inflation which has pummeled its worth to worrisome lows. For those who fly from science for fun, my evidence is the sky-loving prices of foodstuffs!
Whatever has made galloping prices of essentials tormentors-in-chief for average Nigerians must be sad and unsettling.
But to blame the current federal leadership for this is also to politicise a development which has proven intractable for successive administrations and lasted for as far as one’s memory may travel back! A time there was when a Kongo of rice went for paltry N100. Paltry, only by recent price which is a minimum of 10 times that!
At such a phase which now hauls back sad, nostalgic memories, N100 was a fortune! Hundred then is a thousand now. Seek citizens with infinite tolerance nature and godlike resilience, Nigerians remain unmatched!
Inflation is a poisonous element in monetary evaluations. In dealing blows on real earnings, it rubbishes people’s worth, and makes forecasts an impossible adventure.
For Nigerians caught in such a vicious web, planning with cash, especially one which comes on monthly turns, has become an unthinkable joke. Prices jump every day!
Price regulations and monetary stability are primary responsibilities of governments which, using appropriate measures, ensure the channel of production and distribution are monitored/supported with a view to reining in the wiles of an ever-prowling cartel, that would scheme only to gain abnormally from whatever investments: hoarding and scam alerts serve to ginger false worries and create artificial scarcities.
The situation is believed to arise out of ineffective monetary and fiscal policies by the duo of the CBN and Ministry of Finance (MoF), bodies with overriding goal of keeping the economy protected against possible vagaries. As naira starts to dwindle in value, the exchange rate also worsens.
The place of political stability of a country in its economic health should also not be discounted. For years, Nigeria has suffered various forms of unrests, including kidnapping, insurgency and armed banditry, as well as frequent experiences of floods and other disasters, which all end up constraining supply and increasing prices.
This version of explanation for currency instability, even while offering just the familiar tutorials about an error that has rubbished both country and people, has been serially promoted mostly by scholars who show brilliance in their mastery of theory, but routinely shirk in bridging the gown-town gaps for realistic marriage between postulations of economics and hard, practicalities of life.
It is true both fiscal and physical measures must be applied by the apex bank and the MoF to keep naira rates in check, but government must equally always maintain a vigilance upon markets, specifically the supply chain, to know when interventions are needed and in what mode and measure.
Stimulus packages, alongside other moves, have provided so-called healthier economies the means to steady supplies and stable prices.
Here lies the issue! Whatever will condition Nigeria’s all-powerful executive to dip its hands into the till to placate an emergency to forestall hiccups is often vehemently, even traditionally, rejected: farmers, industrialists and small and medium enterprises (SMEs) who suffer whatever accidents, natural or manmade, in their businesses, have often been left to rue and device personal means to manage their fates!
Owing to this absence of foundational supervision, coordination, supports and control at the level of production/supply by federal power, many a thriving initiative have fallen by the wayside, while the few that scale the odds scheme the worst to transfer all burden to consumers!
But such unwelcome conducts within the supply chain may be partly validated by frequent increases in petroleum pump prices, a situation that will always raise production overheads, the weight of which will eventually be borne by public through skyrocketing prices. Today, power supply has only marginally improved, leaving the situation barely altered!
Again, for public servants, salaries and wages have gained increments just about five times from 1990 and now, despite labour regulations stipulating changes at intervals of five years or less, while fuel prices have been upwardly reviewed at least 16 times between 1993 and 2019.
An economy booms when greater percentage of the citizenry possesses strong spending powers. To depress such through incessant petrol price increases is to lay basis for weakened and devalued currency.
It should be clear enough now, going by what has become of Nigeria’s economy, which path leads to better economic prosperity for nations between microeconomic empowerments of individual households and macroeconomic focus on large conglomerates.
Upon the advent of coronavirus, when it became urgent to shut down whole countries, and as America and others offered stimulus supports to their citizens, the country’s federal leadership dawdled and vacillated, even as it vamped beautiful excuses to fly routinely from responsibility.
Citizens are forced to stay at home and observe self-isolation and social distancing regulations, but financial helps, critical to propping irreducible stabilisation of the economy by them are yet to surface from superintendents that would rather fatten personal accounts.
Today, businesses that should be alive are dying, initiatives that should thrive stifle and entrepreneurs are crashing out in their numbers, owing to central supervisory supports that should undergird operations across the levels. Everyone to himself, God for all! How often Nigeria is made to run away from Nigerians at critical times!
A fantastic lie often told by latter day economists across the places is deliberate ‘devaluation of the naira by governments to expand imports for beneficial international trade balances’.
But a consumer nation is a dependent nation, one which must always operate from intrinsic weaknesses in relation to producer nations.
No one ever needed to devalue the naira. Naira is A SYSTEMICALLY DEVALUED CURRENCY! A nation, citizens of which have learned to relish what their economy does not produce, must remain at the receiving end of international exchange deals! Any fear of further falls for he already down?
A combination of taxational and monetary recklessness on part of minders over affairs, endemic rascality within the supply chain and merciless inflationary trends partly prompted by punishing pump prices of petrol lie at the roots of our shrunk fortunes and naira values.
With double-digit inflation rate, at least for the past six, consecutive years, coupled with ages of sundry maladjusted conducts at the top echelons of leadership, who would have needed Bade Onimode’s stratospheric explications about how a naira vacated the topmost floor of a high rise building as a strong currency into the basements of weakened cash! Africa’s strongest economy does not produce Africa’s strongest currency: one is theoretical, the other practical!
Inflation continues to plague a once boisterous Nigeria, partly as too much money in the hands of the few, insanely moneyed, political/capitalist, class, can chase, and have been chasing, only such goods both insufficient and irrelevant to sustaining collective wealth and strength of a nation and its people.
Amidst this gloom comes the method to deal useful blows on the inflation bogey. Covid-19 has suggested an urgency to reflate an economy potentially threatened by worst recession in decades, through increased money supply which can be achieved by lowering interest rates and taxes, as well as mounting solid infrastructural renewals. Such end can be complemented by reducing current prices of petroleum products by at least 25 per cent, however.
Again, price control measures must be instituted, especially regarding food production/supply, to be monitored/maintained with uncommon stringency/vigilance, if it must serve desirable ends.
To be valued at such a time like this is direct cash handouts to certain categories of individuals, including low-level public servants, alongside those whose banking transactions, at least in past five years, reveal basic lack and need.
Revolutionary bailouts must be offered soon enough to the SMEs and industrialists whose fate and fortune may have been abrogated by calamities that, in reversing them and their ventures, have left us all collectively reversed.
Moves seldom made to better lives for humans, either by direct empowerments or by putting in place structures to achieve this in other ways, have imposed inflation and worsened human conditions.
Only by changing such can the current federal leadership help Nigerians out of a malaise that has shortchanged them for decades. It is time governance stopped being about denials!
- Salawudeen, writer and freelance journalist, wrote in through obastunde@yahoo.com
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