Buharism: As The Naira Collapses, So Does Nigeria

 By Tony Eluemunor  

I may not be an Economist but I don’t need an Economist to tell me that as the Naira tumbles in the foreign exchange (of curren­cies) market, thus Nigeria collapses. Or to put it in a proper perspective, thus the quality of the livelihood of Nigerians collapses, degrades, van­ishes, disappears, is tarnished, is destroyed. I added that really need­less second sentence because there could be some people out there that could claim that the country Nigeria is totally different from the citizens.

As strange as that may sound, some people actually think that the coun­try Nigeria is different from her cit­izens, or that the health of her econ­omy does not really impact on the lives of the citizenry. If not, the cost of necessities such as petrol, cement, electricity tariff, food, transportation, books, newsprint, even sachet water and bread, should not be rising ev­ery day and our leaders would be congratulating themselves for a job well done. Also, no government offi­cial has seen it fit to resign. Yes, they also tag themselves as “progressives”!

Were this not to be true, our lead­ers would not be borrowing and borrowing and borrowing without caring about what the unnerving and suffocating and debilitating amount of foreign loans they are bringing upon Nigeria. And as the loans are not being used to shore up the non-existent manufacturing base, it destroys the economy because it increases the debt-servicing load and destroys whatever confidence one investor could have on the Nigerian economy. Please, note that I didn’t write the confidence of the foreign investor because even the Nigerian investor’s confidence has also been shattered.

A patriotic war is needed to save the citizenry from a free-falling Nai­ra, or better still, to save an ailing and collapsing Nigeria and her currency that is increasingly becoming really and effectively worthless.

As the Naira depreciates, and as Nigeria produces nothing the demand of which could increase as a result of a devalued Naira, life will certainly be likewise be drain­ing away from Nigerians for their monthly wages would be purchasing less and less with every new tomor­row. Unfortunately for Nigeria, her only export good worth that name is crude oil, and Nigeria is a member of the Organisation of Petroleum Exporting Countries (OPEC), and so has a production quota to obey. And, this is important, as the local currency loses purchasing power, the cost of imports appreciates – and Ni­geria imports even refined petroleum products, let alone pencil, toothpick, light bulb, the most simplistic hair comb, etc.

Yes, how low should the Naira fall? It has been tumbling downhill for de­cades, but since the inauguration of the Muhammadu Buhari adminis­tration on Friday 29 May 2015, it has been on a free fall, from N199.0151 to $1 USD that day to the Black Market (Lagos) rate of $1 USD = N565 on Thursday, September 16, 2021. Barely a week later on Wednesday, 22 Sep­tember, the Naira had plummeted to N573.00 per $1 at the parallel market. Haba!

Please, put down this reminder: Make it a point of duty to check the exchange rate of the Naira this week Wednesday and you will surely be alarmed by the fact that it must have depreciated further as though it is tumbling into an abyss. Ah, Wednesday would be October 1, 2021, the anniversary of the nation’s inde­pendence. Sorry, that check could bring you a cruel independence gift.

What a steep decline! In January 1985, N1 fetched $1.2. Five months later, Ibrahim Babangida’s econom­ic restructuring made N5 to buy a dollar, at the official rate and it was N7 to $1 at the parallel market. The 5.4 pre- SFEM inflation rate surged to 10.2 within a year. It took the Naira decades to fall from N1 to $1 in the early 1980s to when N199 exchanged for a dollar on May 29, 2015. So, why has the Naira been falling so freely since 2015?

Yet, it should be stated that all through IBB’s administration, a lusty debate on the direction of the economy never ceased. Even during the administration that preceded Bu­hari’s, which was the former Pres­ident Goodluck Jonathan’s, every aspect of that administration was criticized. But suddenly, such whole­some criticism has dried up, though it is most needed.

Why? The answer was provided over a decade before Buhari became President. Mallam Sanusi Lamido Sanusi, former Central Bank of Ni­geria Governor and former Emir of Kano, gave this most valuable insight in a Daily Trust newspaper article of 22 July 2002. Title: BUHARISM: Economic Theory and Political Economy.

Sanusi said that there has been a less than adequate debate on the military government which Buhari once headed and that there had been little or no discussion about Buhari’s economic policies because everyone was focused on Buhari the man instead of his policies. He wrote: “There seems to be a dangerous trend of competition between two opposing camps aimed at glorifying him beyond his wildest dreams or de­monizing him beyond all justifiable limits, through a selective reading of history and opportunistic attribution and misattribution of responsibility. The discourse has been thus impov­erished through personalization and we are no closer at the end of it than at the beginning to a divination of the exact locus or nexus of his ad­ministration in the flow of Nigerian history.”

He continued: “I had no doubt in my mind that the position of Bu­harism was based on a sound under­standing of neo-classical economics and that those who were pushing for devaluation either did not under­stand their subject or were acting deliberately as agents of internation­al capital in its rampage against all barriers set up by sovereign states to protect the integrity of the domestic economy. I still believe some of the key economic policy experts of the IBB administration were economic saboteurs who should be tried for treason.”

Treason? Strong word; especially, as the same economists and sun­dry IBB supporters rallied recently to praise their champion as IBB turned 80 years old. But what about Buharism today? How has Buhari­nomics positioned and strengthened or weakened the Naira? What really is Nigeria’s economic battle resting on? In which direction is it heading?

If the intense and shameless borrowing Nigeria has been en­gaged in will lead Nigeria out of the woods, at what point should we cry “ENOUGH”? In March 2021, the un­employment rate in Nigeria reached 32.5 percent.

I’ll turn to an Economist on how a falling Naira value affects Nigeria: “devaluation by a country whose exports and imports are not price elastic leads to the continued impov­erishment of the nation vis a vis its trading partners. The argument of Buharism, for which it was castigat­ed by global capital and its domestic agents, was that these conditions did not exist clearly enough for Nigeria to take the gamble. First our major ex­port, oil, was priced in dollars and the volume exported was determined ab initio by the quota set by OPEC, a car­tel to which we belonged. Neither the price nor the volume of our exports would be affected by a devaluation of the naira. As for imports, indeed they would become dearer. However, the manufacturing base depended on imported raw materials.

Also many essential food items were imported. We would end up spending more of our national in­come to import less, in the process fueling inflation, creating excess ca­pacity and unemployment, wiping out the production base of the real sector and causing hardship to the consumer through the erosion of real disposable incomes. 

Given the structural dislocations in income dis­tribution in Nigeria the only groups who would benefit from devaluation were the rich parasites who had enough liquidity to continue with their conspicuous consumption, the large multi-national corporations with an unlimited access to loan­able funds and the foreign “investor” who can now purchase our grossly cheapened and undervalued domes­tic assets. In one stroke we would wipe out the middle class, destroy indigenous manufacturing, under­value the national wealth and create inflation and unemployment. This is standard economic theory and it is exactly what happened to Nigeria after it went through the hands of our IMF economists under IBB”.

That was Sanusi defending Bu­hari’s military government. Could Sanusi assess the present Buharism for, according to the Cable online publication of July 31, 2021, “On ex­ternal borrowings, President Buhari increased debt from $7.3 billion in 2015 to $28.57 billion as of December 2020”, adding “$21.27 billion on for­eign loans to the country’s debt port­folio”. 

Only an idiot could say that the devaluation rot did not precede Bu­hari’s emergence as President. But it was because of faults such as the inability of Dr. Goodluck Jonathan and his PDP administration to stem the Naira’s fall and a worsening econ­omy fueled by a blanketing national insecurity – even when the insecuri­ty affected North-Eastern states and not the entire country as it does today, that justified the citizens’ rejection of the PDP and Jonathan at the polls.

In 2002, Sanusi wrote: “I will vote for Buhari to say thank you for the world view of Buharism, a truly na­tionalist ideology for all Nigerians. I do not know if Buhari is still a na­tionalist or a closet bigot and fanatic, or if he was the spirit and not just the face of Buharism.”

His wish came true in 2015 when Buhari became President and the chance dawned for Buharism, es­pecially Buharinomics to be estab­lished in Nigeria. And after six years of Buharism, could Sanusi help us to understand this new Buharism? He should pen another great article, as insightfull as that one of 2020 (19 years ago) and tell Nigerians who failed whom: whether Buharism failed Nigeria or an ungrateful Ni­geria failed Buhari.

Or, perhaps, has Buharism suc­ceeded in making our long lasting dream come true and Nigeria has achieved her manifest destiny and has at last emerged the veritable gi­ant of Africa…and some of us, very blind, didn’t see the evidence?

*Eluemunor is a commentator on public issues

First published on Sat, Sep 25, 2021.