Very painful indeed: the Central Bank of Nigeria (CBN) has made it official – Naira has lost more grounds to the US dollars. According to the Vanguard, Godwin Emefiele, the apex bank governor, “who spoke at a summit on the economy by Bank CEOs on Friday, said the drop in crude oil earnings and the associated reduction in foreign portfolio inflows significantly affected the supply of foreign exchange into Nigeria”.
His words: “In order to adjust for the decrease in supply of foreign exchange, the naira depreciated at the official window from N305/$ to N360/$ and now hovers around N410/$.”
Meanwhile, the Vice President, Prof Yemi Osinbajo, noted within the week that Nigeria would be vigorously pursuing export-focused initiatives to improve our balance of trade and payment which will help the Naira. Call that a cosmetics solution: Mr. Vice President knows the real solution but somehow his party does not want to do the needful. Yes, Nigeria needs to make states competitive by restructuring our economic architectures. If we do that, we will see more organic innovations across states.
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The VP #Osinbajo also commended the DMBs for their patriotic contributions to sustain growth but called for the need to further deepen the provision of capital that would allow businesses to grow over the long term.
— Central Bank of Nigeria (@cenbank) February 26, 2021
Today, a governor can camp in Abuja for six months without any interest in the affairs of his state, since he is aware that at the end of the month, Abuja will credit his state’s bank account with billions of naira to spend. He will spend that money and then wait for the next month. But if we restructure, that governor will have incentives to think and innovate because if he does not do so, he will not have resources to pay his workers and run the state. Until Nigeria does that, even the exports-oriented initiatives will not work at scale.
It is because of our outdated economic formulation that a nation like Nigeria would have 26 states not recording a single foreign direct investment dollar in a year, according to the National Bureau of Statistics.
Twenty-six Nigerian states recorded zero foreign investment in the whole of 2020, figures released by the National Bureau of Statistics show.
The report on capital importation into the country, compiled by the Central Bank of Nigeria, was released on Friday by the NBS.
It captures the total Foreign Direct Investment (FDI), portfolio investment and other types of investments into the country in a year the global economy suffered a terrible battering as a result of the coronavirus pandemic.
Those on the list like my home state, Abia, really did not do much: “By destination, Lagos emerged as the top destination of capital investment in Nigeria with $8.3 billion, followed by Abuja, which received $1.3 billion. The others on the list are Abia State with relatively lower $56 million, Niger with $16.4 million, and Ogun with $13.4 million. Anambra State recorded $10.2 million, Kaduna State recorded $4.03 million, Sokoto got $2.5 million and Kano got $2.4 million. Akwa Ibom received $1.05 million ahead of Adamawa, which received just $20,000.” Yes, Adamawa’s FDI for a whole year was $20,000, and that effort added it to the list of Nigerian states with FDI in 2020! Simply, no incentive to leverage on comparative advantages across the nation.
Nigeria needs to fix its weakest point: fix the structure of its economy, and unleash the ingenuity of its people, to use their comparative advantages to advance the commonwealth. If we do not do that, those export-oriented initiatives will fail, primarily because there is no incentive for the states to think. Yes, if oil continues to run, and the credits continue to flow into the bank accounts, why think when at the end of the day, everyone gets his or her portion?
People, Nigeria’s economic restructuring to add intra-state competition is the way forward! Do it for Naira.
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The problems and solutions to strengthen the naira is right before us. We need to do the needful stated – People, Nigeria’s economic restructuring to add intra-state competition is the way forward! Do it for Naira.
Thanks for sharing.
This Government has a lot Of learned people + technocrats yet lacks the will power to drive this nation into greatness as promised in their campaigns. It is truly a shame. I guess we have accidental leaders scattered across the nation. Restructuring is truly the ONLY way to get Nigeria back on track to greatness. God bless you for sharing this. I hope we the younger generation will ponder on this issues and demand restructuring.
When this current gang captured power in 2015, the Naira was still hovering in the 200 range to a dollar, not anymore.
Why is naira always losing against the dollar? The US Treasury keeps minting new dollars with no productive output, yet naira keeps dropping against it! Can we see how dumb we have become as a people? Everything about monetary tool centres on how well you can bamboozle outsiders, you don’t let anyone outwit you, else you are done.
The CBN will keep sweating as though it’s working, but it’s not really working, because Naira has been on freefall, even with all the artificial exchange regimes it created and serviced. You cannot allow fraudulent people touch things that are holy, but here we keep allowing people whose ways are questionable to fiddle with Naira, their intentions are never noble.
From Buhari to Osinbajo, from Emefiele to Mohammed, just listen to them yammer on diversification or building export oriented economy, but none is brave or credible enough to champion economic restructuring of Nigeria, but they still want us to believe that they care about Nigeria’s survival. These are greedy and selfish creatures, no honourable leader will see Nigeria like this and still feel we must carry on as usual.
The country has indeed lacked truly patriotic leaders as far as I can remember. What we’ve had as leaders have been a bunch of selfish opportunists seeking to further their personal and sectoral interests over national interests. Our leaders have been the true enemies of this country, irrespective of their claims to the contrary. They are the reason many of us are very pessimistic about the future of this economy.
Of course, most people already know that economic restructuring is the only way to sustainably restore the value of the naira. But unfortunately, most politicians in Nigeria joined politics mainly to benefit from the current economic arrangement; and not to create or generate wealth for their states or constituencies. That’s the main reason the economy may not be restructured anytime soon.
Simply true… no much talk.
Thanks, all whom has said what the common man is facing. What is the solution to all this decay ?? . People are losing all they work for.
People continue to clamour for restructuring,to me is just a falacy bcoz what are the incentives, resources,blue prints,strategies to make it actuallized.This government is getting it wrong as they have completely forgotten diversification they were shouting.You don’t expect this to be actualized when loans are not released to people,naira is valueless,no investment,no injection rather leakages.let the government go back to diversification and set plans to achieve it if not restructuring would fail
Words on the street says that when they pick forms for a political office or when they are given a portfolio, a cult membership registration form follows like a shadow.
I just feel they are bounded by an oath and bow to the dictates or evil or nonchalant agenda of their spiritual cult fathers and that’s why you can hear statements from them that their hands are tied.
Just a few of them do have the balls to break free.
I stand to be corrected.
Prof!
No worry yourself, I dey hear of your exploits unlike other paper profs with no invention to their names.
Thumbs up to you.
Thank you – I be village boy here ohhh. No be Abuja person! Lol