In the early days of worldwide economic reconstruction, developing countries were most hit as the new economic/financial proposals were completely alien to them and constituted real threats to their standard of living. It was, rather, an opportunity for western-dominated financial institutions like the International Monetary Fund (IMF) and World Bank to further subordinate developing countries to the economic apron strings of the West. The easiest way for the affected citizens of developing countries to cry out about their astronomically falling standard of living was to embark on riots.
However, in a particular part of the developing world affected by the IMF or World Bank programme, Trinidad, in the West Indies, a musician better known as the calypso king of the world felt so concerned that the people’s harsh living standard must be waxed into an everlasting piece, as Fela Anikulapo Kuti did in Nigeria with Zombie, Suffering and Smiling, Water no get enemy, Palaver, among scores of regular social criticisms. More than his real name of Slinger Francisco, the world calypso king was more popularly known as Mighty Sparrow. To perpetuate harsh memories of his people under Trinidad’s economic reconstruction, Mighty Sparrow, created an irresistible piece on how capitalism had gone mad. Driving his message home, Sparrow, among others, lamented that “Not even dying aint easy. Thousands of dollars, For the undertakers, So you could get a spot in the cemetery. Capitalism gone mad.”
The capitalism being condemned was caused by devaluation of the Trinidad dollar.
Central Bank of Nigeria (just) further devalued the naira with one of those (its) tactics by abolishing weekly dollar allocation to bureaux de change throughout the country in what the bank hoped would increase Nigeria’s foreign exchange as had been dreamt in the past. The ban is the latest in the series of trial-by-error tactics of the CBN called adjustment, instead of owning up to meeting the conditions dictated by World Bank and IMF for Nigeria to run its economy. Why should Nigeria’s economy be directed by these two infamous institutions at the total expense of the poorest Nigerians? The wickedness of IMF was tried in France last year but the attempt was fought to a standstill by public protest for at least 28 consecutive weekends on the streets of Paris, until President Emanuel Macron cancelled all the increases in cost of living in the country. World Bank also tried its luck in Ecuador last year only to be sent packing by protesters.
There were warnings in this column that any thought of increasing cost of living, the net effect of IMF and World Bank economic stipulations, those to suffer were the poor ones. Then, there were the blackmail and desperation that any idea of preserving reasonable cost and standard of living is purportedly for the benefit of the elite. Are elites in any way potentially diminished by the ever-rising cost of foodstuff, public transport, prohibitive rent of “face-me-I-face-you rooms” or even flats? On the other hand, the the consultants entrenched in the Nigerian economic system who sneaked the IMF and World Bank conditions on government are waiting to collect their fees in dollars, while Nigerian victims will soon commence groaning.
Nobody should be deceived by CBN’s assurance not to resume allocation of foreign exchange to bureaux de change. Or if we are to believe that CBN could never again resuscitate the financial muscle of BDC owners, then the CBN controlling team in breach of that pledge to Nigerians should offer to quit en masse when the time comes. CBN’s reputation on operation of foreign exchange policy compels that resignation ultimatum. Today, unofficial foreign exchange rate is N525 to the dollar, all within hours of the scrapping of allocation of foreing exchange to BDCs. That was 18 months after the same CBN triggered exchange rate to N350 to the naira from the far, far lower rate inherited from the Jonathan administration.
Also, time there was when CBN ordered banks not to pay foreign remittances in dollars to Nigerian beneficiaries, because, as the argument went, every country denominates in its local currency. In short, all remittances should be paid in naira. Then, suddenly, Central Bank turned round and ordered all remittances to be paid in foreign currencies. Such inconsistences did not help matters. Owing to the monetary policy of “here today, gone tomorrow,” there was no way of improving the economy. The poor gradually got poorer, while the rich produced more naira billionaires and BDCs became what CBN rightly described them to be: fertile ground for financial crooks undermining Nigeria’s economy.
Lately, the Central Bank announced the transfer of foreign exchange transactions from BDCs to commercial banks. That may even be worse as the CBN may itself discover to be dropping from frying pan to fire. How did dollar millionaires and dollar billionaires emerge in the country in the first place? How did they come about the billions of dollars they arrogantly claim today they did not borrow a cent to enable them found banks of their own? Those crooks, in the performance of their duty to sell foreign exchange to customers, deliberately created artificial scarcity.
In the midst of such stage-managed scarcity and desperation to acquire foreign exchange for student’s fees, medical treatment, travel and business allowances, etc, people are forced to buy the exchange at far higher than the amount fixed by the Central Bank, the difference unstated, unreceipted and paid for under the counter.
That was the experience of innocent customers in the past. How to avoid that criminal and fraudulent past at BDCs is a task for the Central Bank or the bank would have removed the crime from BDCs only to enrich another set of crooks. This does not mean all bank officials are criminals.
Can you guess how the BDCs looted and how much? First of all, the CBN should be censored for involuntary complicity. Erstwhile dying BDCs or at least the industry were suddenly offered new life when the Central Bank resumed dollar funding of 5,000 BDCs, each to the tune of $20,000 every week supposedly to be sold at reasonable price to needy foreign exchange customers.
Imagine the following: CBN subsidises the naira to sell officially at N412 to the dollar and sold to BDCs to sell to the public at less than N430 to the dollar. Owing to high demand for foreign exchange and greed of BDCs, each was selling up to N480 per dollar a total of one million two hundred thousand naira as profit in one week throughout the year of 53 weeks, making a profit of N62, 400,000 as obscene profit for each BDC every year. How scandalous was that?
Mixed news on Tinubu
Media reports generally reported the other day that Lagos governor Jide Sanwo-Olu saw one of his predecessors in London the other day and neutralised earlier reports that Bola Tinubu had for a long time been indisposed or even worse than that. Sanwo-Olu’s trip and pictorial report were of some value to their supporters, moreso as he later described him as hale and hearty.
On the other hand, the Lagos governor’s report could raise further anxiety as to why he was absent from from the well-publicised official ceremony at Iddo railway terminus in Lagos, where President Muhammadu Buhari launched the the erstwhile derelict Lagos-Ibadan via Abeokuta rail line. Equally curious for their supporters was Tinubu’s stay away from the recent all-important election of councillors and chairmen of council and development areas throughout Lagos State, even though their party won all the seats contested.