Columns

February 2, 2024

Solving the FX crisis, by Donu Kogbara

Economy:  FG’s decision to devalue Naira huge mistake — Thompson

One of the hats that Reno Omokri wears is social media influencer; and he recently made an interesting point on X (formerly known as Twitter) that really appealed to me (not least because it was devoid of the disappointing and seriously depressing anti-Igbo sentiments that he frequently shares with anyone who cares to listen.

Since I have had cordial interactions with Reno in the past, I will contact him one of these days to find out why he is so hostile towards indigenes of the South-East. And I assume that we will have a respectful discussion that will enable me to understand him better…and to maybe even persuade him to be less Igbophobic.

In the meantime, let’s focus on what he has to say about the naira.

“The Naira is now N1348 to the dollar, and you are blaming Tinubu. Perhaps you have not heard that the Naira has been floated. That means the laws of demand and supply determine the value of the Naira. Gone are the days when the government artificially set the Naira’s value. And all major Presidential candidates said they would do this, except Kwankwaso. If you want the Naira to appreciate, do these 20 things:

1. Instead of MTN, Airtel or Etisalat, use Glo

2. Instead of Mercedes, Range Rover, or Honda, buy Innoson

3. Fly Air Peace over Air France, KLM, or Lufthansa

4. Bank at First Bank, UBA, GTBank, and Zenith over Stanbic

5. Watch AriseTV, Channels and NTA over Multichoice DSTV

6. Buy Dangote and Ibeto cement, and avoid Chinese brands

7. Watch and buy Enyimba FC, Kano Pillars, and 3SC over Manchester United, Barcelona, PSG, and Napoli

8. Buy music of Nigerian origin from streaming sites instead of downloading foreign artistes

9. Patronise DAKOVA, Mai Atafo, Mudi Africa, and JADZ Couture (maker of my babanriga and agbada. Show her some love on +234 704 477 9973) over Armani, Gucci, Balenciaga, and Louis Vuitton

10. Drink palm wine over champagne, Hennessy, Scotch Whiskey, and Irish Cream

11. Shop with your local market woman instead of at Shoprite

12. Buy and eat only made in Nigeria rice, let Thailand eat their rice

13. Consider cassava bread over bread made with foreign wheat

14. Buy Zinox PCs, laptops, and tablets

15. Instead of Birdseye custard, Quaker oats, and Kellogg’s cereals, drink akamu/ogi pap

16. Leave KFC, and patronise Mr Bigg’s, Tantalizers, and Mama Put

17. Stop using Holland Wax, and imported George and wrapper. Use Kaduna textiles, aso oke, Akwete cloth, and other local textiles

18. Watch less Hollywood and Bollywood movies, and go for Nollywood and Kannywood

19. Holiday and honeymoon in Obudu Cattle Ranch, Yankari Games Reserve, Ikogosi Warm Springs, and attend Argungu Fishing Festival

20. Reject imported frozen fish, meat and dairy products and buy fresh produce from local producers.

Nobody is coming to save Nigeria. It is only Nigerians that will save Nigeria. Local brands may or may not be as good as foreign ones, but with continued patronage, they will improve in quality. Buy them, and your Naira will rise along with your personal happiness and the international rating of the green Nigerian passport. Your value is tied to Nigeria’s value. Buy Nigerian and Nigeria’s foreign reserves, trade balances, and debt to GDP ratio will automatically improve.”

Reno’s opinion about how we can liberate ourselves from the insanely escalating and extremely alarming foreign exchange disaster made sense to me. But I am not very smart when it comes to economic theories, so I decided to consult Professor Kingsley Moghalu, a former CBN deputy governor and world-class economist (who is, coincidentally, from Reno’s least favourite geopolitical zone!).

Prof’s response when I asked him whether Reno was right:-

“Buying Nigerian will certainly help but it’s not the main issue. Those foreign companies that operate in Nigeria and pay taxes also employ Nigerians so we should not also cut our nose to spite our face or whatever the saying is. The better strategy is one that makes locally produced goods much cheaper than foreign goods.

“Ordinary Nigerians will be able to afford local products, the wealthy can buy foreign made shoes or champagne. That’s how it works in countries like Brazil. But without electricity and every business running on generators and driving up production costs, Chinese imports are cheaper and a lot of dumping takes place.

“The real issue is that we do not have a diversified economy of value-added exports that can earn forex for Nigeria outside of crude oil. Oil is past its heyday because the global oil market is flooded with non-OPEC producers, and we are not even meeting our own production quotas because of oil theft and other problems.

“There is no solution to the Naira’s woes except (a) foreign confidence in the economy improves and forex portfolio investments increase massively to the $10-20 billion range; (b) domestic confidence improves and the mopping up of dollars by corrupt politicians and even ordinary citizens (there is increasing panic buying of dollars as a store of value) decreases; and (c) we begin reposition the economy away from dependence on oil revenues for forex inflows; and (d) in the meantime we increase oil production and exports (difficult because a lot of our oil production has been ‘pledged’ for forex loans.”

In other words, Reno’s suggestion is somewhat simplistic but not without merit; and since we regular citizens cannot force the government to adopt policies that will diversify the economy and so on, let’s at least do whatever we can do to help on our own micro level.

I hope that all who regard themselves as patriots will think twice before they reach out for imported goods and services in future.

I am a knee-jerk consumer of all sorts of foreign goods and services. But I will try to cut back on fancy stuff and buy local more often.

Dear Vanguard readers, do get in touch to tell me what imported item you will miss most if you decide to take Reno’s advice.

PLEASE CHECK OUT MY PODCAST SERIES. TITLED AFRICA NOW! IT CAN BE FOUND ON APPLE OR SPOTIFY AND IS ENTERTAINING AS WELL AS SERIOUS.

RESPONSES TO  donzol2002@yahoo.co.uk

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