The Outcry Against the CBN and the Cry for True Federalism

Pace K. Olaparodi‎.     
olaparodi@gmail.com
December 22, 2015 

I was at a dinner in Port Harcourt yesterday and most of those present had harsh words for the CBN and its leadership. As the diners lambasted Godwin Emefiele, the CBN Governor, in turns, my attempts to make them see the CBN as almost helpless in the present situation fell on deaf ears until I said 'all of you caused this problem'!

There was silence. They sought to know how. Then I started. Most of the men wore imported shirts, shoes, watches and ties. They used imported mobile phones and sat on imported furniture while watching the Arsenal/Man U match on imported TV sets being broadcast by another imported medium (DSTV).

The CBN needs to begin a massive public enlightenment programme. It also needs to start engaging the fiscal authorities in a firm and unambiguous voice. 

There is a strong feeling out there (among the public) that it is either the CBN is just being mean or simply unable to tackle manage the foreign exchange problem. Because of this, the sympathy of a lot of people is not with the CBN.  ‎The negative feeling has gone sky high on the back of the 'suspension' of PTA/BTA, the planned restriction of the usage of debit/credit cards from January 2016, the sharp fall of the Naira exchange rate to N280 in the parallel market, and the revelation that CBN paid out dollar cash to Dasuki (the embattled former National Security Adviser).

The painful thing is that these feelings are largely based on ignorance and lack of education. A lot of education can swing the ill feelings against the CBN to sympathy and even support.

The public must be told in clear terms that the CBN does not manufacture dollars and is not sitting on a pile of dollars which it has refused to release to importers or manufacturers. 

The public must be reminded that the crude oil price in June 2014 was $112 per barrel compared to less than $40 that it is as at the time of writing. ‎Hey! Oil contributes 90% of Nigeria's foreign exchange and its price has fallen by almost 70%! 

It is not 'CBN policy' that has made dollars dry off. It IS the mighty fall of crude oil price and the habits of the Nigerian people to import everything from abroad ranging from finished products to leisure. ‎Well, we cannot control the price of oil but we can sure work on our habits and behaviour. 

The Nigerian public needs to be told that their breakfast or lunch is made from imported eggs, palm oil, coconut, tomatoes, okro, rice, frozen chicken/turkey, beans, cabbage, lettuce, etc. Nigerian women wear imported hair, lashes, nails, make-up etc. The men and women drive imported cars that run on imported petrol. Many members of the public will be shocked and the shock may push some of them to take advantage of the business opportunities. 

Thus, it is the public that 'manufactures' dollars through its behaviour and lifestyles.  The 'CBN Policy' is not responsible for the free fall of the Naira. The CBN only manages or keeps the dollar stock, created from the collective habits of the public, as external reserves. Do you deserve to spend dollars when you do not earn enough of the greenback? 

The public must be educated that the external reserves will soon be depleted if the 'demand management' of forex by CBN is stopped. And by then, the situation would be so bad that the country would not be able to import or buy essentials like drugs or critical raw materials from abroad.

The public must be informed that devaluation is not an option because the country does not produce anything in substantial quantity. Devaluation will only throw more people into poverty and misery.

The public must be engaged to change its lifestyle and behaviour if it wants the external reserves or the Naira exchange rate to appreciate.

At another level, Nigerians cannot understand why their debit cards will be stopped from making retail payments while the same CBN is doling out dollars to BDCs twice a week. The dollar fiesta to BDCs has to be stopped immediately if indeed ‎forex is scarce. I am not aware of any country in the world that does that. 

The government must aggressively tackle the problem of the refineries and lure companies with juicy incentives to invest or set up in Nigeria. They should target companies that can produce mobile phones, cars and other forex-consuming products. This is very urgent. The same urgency must be applied to the removal of fuel subsidy. A pro-Nigeria and development-friendly trade and industrial policy must be announced without further delay. There is no time at all.

The Federal Government and the states must aggressively substitute imports and frenetically promote exports. For example, they should immediately work with states to have a National Dress Code that uses local materials and approved styles for employees in the formal sector to wear to work. Enough of wearing imported shirts and suits in a tropical environment. This would conserve a lot of foreign exchange and create employment for actors in the local dress value chain.  All states that have tourist attractions or centres should consider ways to generate local and foreign curren‎cy through them.

If the Federal Government (FG) wants to save the country, this is the moment, more than ever before, to return to True Federalism. Restructure the country and watch the states become creative and imaginative. The ensuing healthy rivalry which drove development among the regions in the First Republic ‎will be resurrected. It is an unparalleled shame for about 30 out of 36 states to be so broke to the extent of being unable to pay salaries!

The return to TRUE FEDERALISM will have immense spin-off benefits for the Police and our infrastructure. And would most likely kill off the calls for secession or self-determination in some quarters. So many sectors like education, health, agriculture will also fare better. The FG‎ should focus on just a few matters - immigration, external security, customs, central banking. 

This is the way to prevent the country from an imminent economic collapse which would have severe implications for the political stability of the polity. 

Yesterday, the strongest reason for TRUE FEDERALISM was political. Today, it is economic. There may be no tomorrow without it. ‎

true federalism z nigerias only hope to become agreat nd dominant country bt ppl ar nt seeing the biga picture.

You are on point
That recurring word ; IGNORANCE.
You are saying the same things that cost the almighty Thomas Sankara his life.
Tell that to our so called havard, worldbank and IMF miseducated experts.

May be they will go for true federalism when oil price gets to $20.