By Henry Boyo
Tomorrow, August 22, 2017, will make 15 years, since the advocacy, ceaselessly canvassed in this column, for a payments reform, that would regenerate and rapidly propel inclusive economic growth, was presented to government.
Incidentally, in earlier, casual discussion of such proposal, at an ‘Old School Boys’ meeting, unexpectedly, led to an invitation to make a presentation to the National Economic Intelligence Committee (NEIC) with Prof Ibrahim Ayagi as Chairman. Despite the short notice, a paper titled “A LIBERALIZED FOREIGN EXCHANGE MARKET AND ITS ECONOMIC BENEFITS”, was co-authored with a colleague, Adaighofua Ojomaikre a kindred spirit on this matter, and the solution proffered, in that paper, was later discussed during our visit to NEIC’s Abuja office on the August 22, 2002.
In retrospect, the NEIC team seemed in accord with our analysis that the subsisting, primitive, payment model, adopted by government was the primary cause of our weak economy, even when foreign exchange revenue was increasingly more bountiful. Nonetheless, Ayagi personally wondered, if the solution prescribed in our paper was in current application in any country. The NEIC team, was obviously startled, by the response, that no successful economy, that we know, consciously captures export revenue, as our government presently does, and then proceeds to create an estimated local currency equivalent as replacement for such revenue before sharing and spending, and then embarks on auctioning their forex booty in a market already suffocated with excess Naira liquidity.
Ultimately, Professor Ayagi agreed that the committee would consider our paper in future discussions with, incumbent President Olusegun Obasanjo.
Regrettably, there was no feedback thereafter from NEIC, after this encounter. Consequently, in an attempt to spur the Agency into action, additional copies of the same paper were printed and sent directly by courier, with a cover letter in October 2002, to President Obasanjo and some critical cabinet members, including the Finance minister, Okonjo Iweala, the Education minister, the Secretary to Government and Joseph Sanusi, incumbent Central bank governor, amongst others were also copied.
Regrettably, there was equally no response from the president’s office, so our letter dated March 8, 2003 to NEIC drew attention to CBN’S recently published “2002 Macro Economic Review” which indicated that “the year recorded, continued excessive growth in monetary aggregates, relative to set targets”.
The same letter of the 8th of March also observed that “the various, unfavourable economic indicators merely represent symptoms and complications of an already correctly diagnosed disease, namely excess liquidity.” We also noted that, “it has been amply shown that excess liquidity in Nigeria today, is self-inflicted, as it is traceable to the faulty translation of hard currency revenue into the domestic economy”. We therefore affirmed that” no serious country, abuses and debases its currency in that manner.”
In view of experience, NEIC’s prompt response to our letter of March 8, clearly came as a surprise; an excerpt dated 25/3/02 from the rather terse response is as follows:
“The National Economic Intelligence Committee (NEIC) acknowledges, receipt of your letter dated 8thMarch, 2003, on the above subject matter (i.e. liberalisation of the forex market). The NEIC notes that you have already contacted Mr. President and the Governor of the Central Bank on the same subject matter. This development forecloses further consideration of your proposal, by the committee, until Mr. President concludes his consultation on the matter.”
Curiously, there was no acknowledgement, or response whatsoever, from any member of the federal executive to whom we also couriered the report. Nonetheless, CBN’s Director of Research O.J Nnana (Ph.D) sent a long winding response; part of the conclusion in Nnana’s letter dated November 29, 2002 reads as follows:
“We are, however, very skeptical on the level of trust that you put on the various tiers of governments regarding your proposal to fund their accounts in foreign exchange under your proposed “warrant system”. We hope it would not be another source of capital flight and a free run on the external reserves and the naira exchange rate.”
“My colleague, Ojomaikre and I, refused to be deterred by the disappointing lack of interest from a government team , that seemed so self assured in their capacity to properly manage the economy, even when the critical indices of inflation, cost of funds, exchange rate stability and unemployment rates were clearly out of sync with tested models for sustained, inclusive economic growth anywhere.
We consequently, proceeded to Channels Television in Ikeja, where we asked to speak to anyone, with whom we could discuss our recommendation for a progressive payment reform, that would revitalize and transform Nigeria’s economy. Unexpectedly, barely three days thereafter, the TV station invited this writer to elaborate on some aspects of our paper, which had resonated in that day’s news bulletin.
Curiously, despite the frequency of alternate media invitations that followed thereafter, the CBN, who is invariably the acknowledged villain, in the disruptive and disenabling payment system, that has continued to impoverish us, kept mute. However, in November 2004, I was invited to the Vanguard newspaper office in Kirkiri; It was, certainly my first meeting with veteran journalist and publisher Mr. Sam Amuka, a.k.a uncle Sam, who offered a lunch treat in the staff canteen, before requesting that I should write on those issues that he had seen and heard me discuss passionately in several media.
I, of course, thought he meant a one-off article, but he insisted, despite my protest, that I do not have the tenacity and discipline of a regular columnist, that he actually expected a weekly column. I was probably flattered by what I felt was blind faith in my ability, but Uncle Sam seemed so sure, I could do it; besides, he was also very charming in asking, and it became difficult to refuse.
I assured him, later that afternoon, that I would try, and my first article in the RATIONAL PERSPECTIVES column was published in vanguard newspaper 22nd November 2004, the Daily Independent and Punch Newspapers also joined in syndicating the column in 2005 and January 2012 respectively.
Regrettably, inspite of over 700 articles in the print media, with hundreds of interviews in both print and electronic media, since 2002, government and its economic team have remained resistant to our call for progressive economic change while excess liquidity remains prominently unyielding; invariably, inflation has sadly climbed from 13% in 2002 to over 16% today, while cost of funds to business is well above 20%; meanwhile, the Naira is comatose, with youth unemployment rate exceeding 25%! Will they ever learn?
Nonetheless, it would be a disservice to Nigeria and Africa to halt the advocacy for CBN to release its stranglehold monopoly on the foreign exchange market.
SAVE THE NAIRA, SAVE NIGERIA!!