ECONOMY CRISIS AND IMF LOAN: Nigeria Opts For Self-Medication

The message delivered by the IMF Managing Director, Ms. Christine Lagarde when she visited Nigeria earlier in the year was that only Nigeria can help herself out of her economic quagmire. I also re­membered her advising Nigeria to address some structural defects ob­served in the economy if Naira de­valuation was not an option.

President Muhammadu Buhari has also been using every opportu­nity of any of his foreign trips to ex­plain that Naira cannot be devalued further. Even when the local neo-co­lonialists sharks in concert with their foreign partners went the whole hug campaigning for further devaluation of the Naira, they got the snub of the President. Consequently, they em­barked on destructive campaign - ‘Emefiele Must Be Sacked’. Yet, the President stood solidly behind the CBN governor.

A bold and reassuring statement ever made by any official of govern­ment in Nigeria, even in the con­tinent to any neo-colonialist in­stitution, is the one credited to the Nigeria’s Finance Minister, Mrs. Kemi Adeosun, at the just conclud­ed annual Spring Meetings of the two multilateral institutions – IMF and the World Bank in Washington D.C. where she was quoted to have told the IMF boldly that “IMF could be a doctor, but for Nigeria our mes­sage is not sick, and even if we are, we have our own local remedy”. In medical science at times there can be a critical choice between going with a doctor that will worsen your case or seek self-help. In the context of the current economic situation, it’s obvious that Nigeria has rightly set­tled for the later.
Similar stance taken by Nigeria’s apex bank – the Central Bank ofNi­geria - few months back incurred the fire of agents of these devaluation and neo-colonialists. It will be noted that, shortly after the Bank’s initial de­valuation of the local currency, and subsequent withdrawal of 41 items from accessing its FOREX. This was a decision apparently taken by the CBN management to rescue the cur­rency from its free fall, these ‘hawks’ took up arms against the CBN.

They found Emefiele’s action as an affront. These sharks have been so enmeshed in their illicit trade of round tripping and currency specu­lation at the detriment of the nation­al interest. The import of the CBN message was that Nigerians should drop their appetite for foreign goods, and start patronizing home made products.

Before the composition of Presi­dent Buhari’s cabinet, the CBN was managing the economy alone. For the economy not to collapse, the CBN took some bold steps which some cynics believed was inimical to the interest of Nigeria. The apex bank had seen that if Nigeria was to continue the way it was going, we might not have a Nigeria stand­ing today. Nigeria’s Chief Executive Officer, President Buhari, is experi­enced enough to have seen the mer­it in the economic recovery initia­tives of the CBN - the more reason he has not faulted any of the Bank’s monetary policies since coming to power. Gladdening enough is the co­hesion and synergy of purpose be­tween the federal government and the CBN after the inauguration of the federal cabinet to rescue Nige­ria. This is what Nigeria needs at this critical time.

What happened in China recent­ly when President Buhari visited and signed an investment deal with the People’s Republic of China and at­tracted US $6 billion investments to the country was a master stroke to finally nail the coffin of enemies of Nigerians, - the economic sabo­teurs, who had been manipulating and feeding fat on foreign exchange at the parallel market of the FOREX subsector, thus holding the nation’s economy to ransom.

When some few months back the Central Bank of Nigeria mooted the idea of diversifying its foreign ex­change reserves from the US dollar, switching a reasonable portion of it into Yuan, the cynics never believed the President will heed the CBN ad­vice. With the swap agreement, the Yuan will flow freely within the Nigeria banking industry and ul­timately make trading seamless. More so, with China as the second largest economy in the world and a country where the vast majori­ty of Nigerians transact business­es, the pact will greatly reduce the craze and bottleneck of procuring the US dollars.

The US dollar started crashing against the Naira some few days past, and it is expected to continue. Some of those hitherto antagonistic of the CBN policies have been lend­ing their support to this deal. Sur­prising was the support and com­mendation by the Lagos Chambers of Commerce and Industry (LCCI) and the Association of Small Busi­ness Owners of Nigeria (ABCON). Even the President, Association of Bureau de Change Operators of Ni­geria (ABCON) have attested to the fact that the pact will force the US dollar to beat a retreat.

By Abidemi Gbolahan
*Gbolahan writes from Ibadan.

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