Takeaways From Nigeria As An Economy Divided By Nasiru Suwaid
One of the most significant contradictory convergences between economics and law as scholarly fields of knowledge is the fact that you could not find two educational subjects so different, yet one could not thrive or even exist from the other, without complementing each other.
While law is predicated upon verified principles, enacted legislations and established judicial pronouncements, as for economics, its theories and principles are so intangible, they are usually applicable and provable certifiable only on particular environmental scenario basis. But, despite this width in differences, they similarly and singularly prosper and blossom on one single subjective vision: perception; that personal belief which enables an individual to have trust on mere expectation.
It is within that context, law or rather justice, it is not only about cold hard facts, those tangible evidences presented, which determine and confer guilt or innocence upon parties that are presented for adjudication. In fact, it is also about the subjective vision of whether justice could have happened or it has been done, it must have been seen to have been done.
On another angle, economics or rather business, also profits from positive perception, because, it is upon such basis, business confidence is generated, investor confidence is promoted and consumer confidence is encouraged, to galvanize positive exchanges in goods and services, which supports entrepreneurship as a gravitational force that inspires general wealth creation, poverty alleviation and development oriented productive growth.
It is upon this basis, the Cable News Network (CNN Money) was in Abuja for the whole of last week, for a production that is featuring the country for the whole of this week, examining the economy; on the challenges, the hurdles, the gains and the fears of what might become of a nation, facing widespread economic slowdown and whether, it is the kind of contraction, which merely lingers for an alignment in fiscal and monetary policies to click.
Despite the falling numbers in economic data and development report indices, regarding investor confidence and general investor remittance into the economy, the characteristic fundamentals of a stable economy still exist. It is that which provides sound return for investment, reasonable profit for an acceptable risk and good market for value adding growth and production.
It is the reason why the Dangote Refining Company, as at then, despite the fact the upstream sector of the Nigerian petroleum industry has not been deregulated, it still went ahead to start the construction of one of the largest refineries in world.
And, as if by providence, the sector was later deregulated, even before the completion of the plant and the beginning of mass production for an eager and awaiting Nigerian consumer market, suffering from petroleum products scarcity, exploited by a cabal of monopolistic profit driven marketers, scandalized by the pure rent seeking attitude in the filling stations and bewildered about the crass profiteering activities of a group, which has been thoroughly discredited and found complicit in the international image distorting and corruption laden scheme called; the oil subsidy regime, a characteristic highlight of the immediate past administration.
Although in the global community, the outstanding perception and established image about the country, it is about the fact that Nigeria is seen as fantastically corrupt, as confirmed by the infamous Freudian Slip of British Prime Minister David Cameron, a day before an international summit on corruption. However, the recent evolving narrative about the country, where many a public commentator have openly wondered, indeed even complained, whether the present administration is only interested in fighting corruption, to the detriment of other important segment of governance, such as the national economy.
Most significantly, the perception of Nigeria as diligently fighting corruption, would surely aid the emerging belief about the country, that if for nothing else, corruption is not thriving in Nigeria of today, surely a booster to the emerging business confidence, growing investor confidence and revolving consumer confidence.
And this two other things:
IF YOU ARE ANGRY WITH PMB OVER THE ECONOMY
One of the recurring and widespread opinion about the administration of President Muhammadu Buhari (PMB) after the first year in office, it is the persistent complain about the economy, which in actual fact is not really true, as the real problem is the rise in prices of goods and services, economically, the high trending in Consumer Price Index (CPI), or if I am to put more succinctly, the unacceptable upward inflationary movement in the market.
The question to ask here is why is the inflationary trend, defying the traditionally economic means and methods of checking inflation, be it reducing liquidity in the financial system, encouraging lending to the productive real sector in the economy and the alignment of monetary and fiscal policies, through appropriate foreign exchange management, also, it could mean the adoption of flexible exchange rate mechanism without necessarily devaluing the national currency, an act that causes the spiraling in inflationary rate.
But, why does the economic theories fail in Nigeria, it is very simple, it is because of the structural imbalance in the economy, a land that has more traders than manufacturers or if I am to put it more appropriately, an entrepreneur is more likely to be a trader than an industrialist or even a value adding producer, in fact, Nigeria imports almost everything and unashamedly, we are proud to be marketers than manufacturers, thus, when we don’t have crude oil money to import things, we collectively suffer as a nation.
WHY EMEFIELE SHOULD HASTEN THE CONSULTATION
After the last meeting of the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) and the adoption of the flexible foreign exchange rate in the forex market, which is not necessarily a devaluation of the national currency, though, through the fluctuating movement in the market, the naira could as well gain or lose value.
It seems the established opinion about the apex bank, that it is not independent has been punctured, as interview upon interview, President Muhammadu Buhari (PMB), did not mince his word about his personal opposition to a flexible exchange rate, yet, he still acceded and accepted to adopt it as a necessity to quell the uncertainty in the market and halt the distorting activities of the speculators.
The challenge here in the intervening period is to move and adopt a position, before the refined petroleum marketers disrupt the financial system and overall economy, through a conjured scarcity of the petroleum products. After all, they have already hiked the prices of aviation fuel, spiked the prices of diesel in the market, claiming unavailability of foreign exchange to fund their businesses. It should not be normal or even acceptable for the private sector to be blackmailing the government into action, every time, as it happened with the removal of subsidy in petroleum products.
Finally, this is wishing my readers Ramadan Kareem, a successful recuperation for President Muhammadu Buhari (PMB) and back to work fit as a fiddle.
Follow me on twitter: @neeswaid
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