The release of licenses, in June this year, to 65 Nigerian companies to establish local refineries must be welcome news to everyone who is unhappy with the overwhelming Foreign Exchange bill for our fuel imports. The licenses were granted barely two weeks after President Buhari’s inauguration, and probably provide a strong indication of PMB’s burning desire to reduce Nigeria’s huge fuel import bill and hopefully also reduce or eliminate the incidence of subsidy in fuel pricing.

Indeed, Naira devaluation is probably the most potent weapon against the prosperity of Nigerians. Nigeria’s migration from a potential industrial power house with bustling social affluence, to a subdued and stumbling economy clearly began with the adoption of IMF’s Structural Adjustment Programme during Babangida’s regime: the chorus from International Agencies, at that time, was also that falling oil prices with an unserviced debt burden and the consequent restriction of trade credit to Nigeria, were the products of an allegedly overvalued Naira exchange rate.

“First of all, you have got liquidity surplus in the banking industry; … there is over N1.3tn or so sitting in banks and belonging to government agencies. Now basically, they (these funds) are at zero percent interest and the banks are lending about N2tn to the government and charging 13 to 14%! Now, that is a very good business model, isn’t it? (You) Give me your money for free and I lend it to you at 14%; so why would I go and lend to anyone?”

Regrettably, this enabling reform that is clearly in consonance with the constitutional objectives has ironically been rejected on the ground that it is “unconstitutional”. Surely, for crying out loud, no one is suggesting that we should spend dollars instead of Naira; nonetheless, CBN appears insistent on cutting its nose to spite its face, as a payment reform that would facilitate the achievement of its core mandate for price stability is brazenly rejected as illegal.

Notwithstanding, the CBN has again assured Nigerians, that the current Naira rate would be stable, as it is inappropriate for the tail (i.e. the small parallel market) to wag the dog. Nevertheless, the CBN may have been in denial of the inflationary potential on the economy of the ultimately higher market prices for rice and 40 other items recently banned from official dollar purchase.