Could There Be A Restructuring Without Pain? By Nasiru Suwaid
One of the unique characteristics, which has made sociology as well as economics to belong to the School of Humanities, it is because they are both social sciences, which for the former, it studies the communal as well as personal character traits; habitual preferences, attitudinal choices and personality structure of an individual, which cumulatively form a particular society and distinctively, makes it separate from others.
As for the latter, economics specifically, it understudy those same character traits of an individual, within the context of their needs, wants and desire to prosper economically and satisfy the vision of having a quality life, blessed with a stable income, decent accommodation, access and ability to afford quality health care and generally, that inordinate desire of anyone and everyone, to have a perfect life, which is not encumbered by the reality of desperate poverty.
Now, despite the divergence of opinion on the Nigerian economy, one of the area of convergence or agreement, is that it is afflicted by ‘structural’ distortion, being highly or rather, mostly reliant on a single primary non-renewal product; crude oil and its associated natural gas. Also, it is not because there has not been an effort, the country’s economy is not diversified, but rather, any attempt at economic restructuring, which would affect and impact habitual preferences, attitudinal choices and general economic characteristics of an individual and personal economic wellbeing is bound to be painful, akin to a smoker facing withdrawal syndrome, when he tries to stop the medically costly habit.
It is also bound to be highly risky, when a state through its citizens seeks a different yet unproven means of earning national income, it is also structurally distorting but that is what it takes to effect the correction of a distorted economic structure.
It is within this context of pain, an entrepreneur trader suffers to gain access to foreign exchange currencies, in order to satisfy the payment needs of imported products, despite the fact that such legitimate vocation, hardly adds anything in the value chain. It is within such circumstance, a consumer of foreign commodities, finds empty shells and when she complains about the unavailability of household necessaries, she is told that it is because of the scarcity of forex, in fact, it within the latitude of this pain, that characteristic economic rule of demand and supply, which sets and determines price equilibrium comes into effect.
Thus, a situation where fewer foreign goods are being chased by more naira notes, only helps to send into the spiral, the rate of inflation in the economy, indeed, even the industrial sector suffer, to have foreign exchange in order to acquire spare parts and necessary inputs, until the required policy is formulated, concretized and perfected, to favour the value adding productive sector and driver of economic growth.
And this two other things:
THE BEAUTY IN OSINBAJO APPROACH
As a minor league or rather, a little league economics scholar, nothing fascinates me as the policy character and vocational personality of Dr. Ngozi Okonjo-Iweala, President Goodluck Jonathan administration’s head of economic management team. The way she left her imprint on Nigerian economic system and her spectacular failure in not being able to plug financial loopholes, despite coming to the country with a reputation as a strict financial disciplinarian.
What I found out is that despite her celebrated strong character, she is highly susceptible to leadership influences, that would aid her to succeed, in a more financially responsible administration, as in the case of an Olusegun Obasanjo government, and, she could as well be influenced to superintend a financial heist, with what happened in her last outing in the Goodluck Jonathan administration.
But, that is not even why she failed, economic policy wise, it is her ‘exclusive’ economic policy administration, a kind of top-bottom approach, which operates the Nigerian economy, as a federal government arrangement, that does not so much involve the states; in terms of policy evolution, policy comprehension, policy education, policy evaluation, policy direction, policy integration and the general participatory policy formulation.
It is why the President Muhammadu Buhari (PMB) administration has enabled and empowered the National Economic Council (NEC), a constitutionally established ‘partnership’ of a national body, comprising federal and state governments, to lead in the formulation of an integrated economic policy direction and approach, to create a truly aggregate and agreed formula for economic stimulation and growth.
THAT RUN ON NIGERIAN BANKS
Of course, of all the various sectors of the Nigerian economy, indeed, not only the economy but the multiplicity of sectors of the Nigerian state, none is as selfish as the banking sector, because, it is always motivated and guided by profit motive, personal profit motif, yet the institutional state has to protect, support and encourage the sector, after all, wasn’t it a wise adage, that says: ‘it is money, which makes the world go round.’ Thus, any report about the health of Nigerian banks, makes frontline news, as well as create a bother and even panic, amongst the generality of greater Nigerian public, highlighting the effect and impact of circulation of money, in relation to trade, business, entrepreneurship and the greater economic activity in the nation.
But, most surprisingly, for the past two weeks, there was a run on Nigerian banks, however, most mysteriously, nobody cared, as the run was not in the banking halls, rather, it is in the Nigerian Stock Exchange (NSE) and it is against their shares and stocks, dragging the market a notch lower in value and valuation.
Most fortunately, it is not because the banks have challenges with liquidity, rather, it is the investor’s way of showing outrage and displeasure with the manner the banks are refusing to declare an adequate enough dividend or to be blunt, the type of dividends declared is not commensurate with the profits announced. It just doesn’t make any sense, when a player in an economy that has considerably slowed down and it is so much exposed to a low profit and debt ridden petroleum sector, thus highly prone to bad loans, however, goes ahead to announce historic profit margins, though, some have whispered, it is merely paper projections, yet the banks do not wish to disprove it, by sharing the gain with their investor ownerships.
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