My only Economics teacher remains OA Lawal. In SS1, I bought his Economics textbook, read and went and wrote GCE (external WAEC) and made a distinction. I had told my school principal to allow me to register for 15 subjects, in senior secondary, but he said WAEC allowed only 9. I said “Sir, it is unfair to give an option to either do Further Maths or Economics, Geography or Lit in English…I do the 9 but others, I will write in GCE “. So, I started reading OA Lawal and since then, I have been applying his teaching.
When Nigeria promulgated its floating of currency, and fuel subsidies, I tested them with OA Lawal basic things and wrote:
- “Nigeria’s floating of its currency, while progressive, will cause severe perturbations in the economy – and a stable state may not come as most experts have predicted: “- June 2023
- “Nigeria will either pause the full floating of its currency or return back to fuel subsidy ” – July 2023
It was so clear that the Nigerian economy will struggle under those two policies. I studied banking & finance to doctoral level, and when the African Union was rolling to make the currency one, a decade ago, I sent my thesis, arguing against unifying the currencies without prior regional convergence. Doing that would trigger welfare losses as a supranational central bank would struggle within Africa’s heterogeneous economies. That project was paused! Read the piece on AU website:
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“In his O’ Level textbook on economics book, OA Lawal explained demand and supply and the movement of price on the demand-supply curve. If I apply what he explained in that book, floating naira with no capacity to earn USD dollars will kill Naira, because there is an asymmetric imbalance on demand and supply of USD in the Willing Buyer, Willing Seller nexus. In other words, two people may each have $100 to sell while twenty people want to buy each $100. If you do not close that number to near parity, the equilibrium point will keep shifting and I do not see how Naira will stabilize because demand outweighs supply here.”
Now, we are spending more on fuel, our currency has lost value, inflation is high, etc. just because Nigerian leaders fail to apply common economics in our governance framework. Do you need a PhD to know that if demand is higher than supply (ceteris paribus) for an inelastic product that price will move dangerously to the wrong side?
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Why can’t CIT be 18%? Who says it must be over 30%? Please don’t tell me that Nigeria has a lot of bills to pay, because there’s nothing in this country that encourages a neutral person to invest here. Stupidity is never a virtue, so we can at least try to be real for once.
You have interest rate on loan at above 30%; your petrol and diesel are lacking effective subsidies; electricity is not abundant and stable; the naira is volatile. So, on what exactly will any sane human cling on to pour money into Nigeria? Why are we like this? It is only a fool that feels there are no options, every working brain will always have options. If Nigeria government declares what its objective is, then options will appear immediately. We are not all daft here, but the managers are worried about what they will likely relinquish, that is how selfish and dishonest people think.
What is it that we don’t understand about this economy? Just a case of glorifying mediocrity and making everything seems complex? But we often find money to distribute to people, where do we get the money from? Why are people determined to earn fat salaries/allowances from an economy that is struggling to afford basic things? And we think we lack options? We don’t.
Thieves.