By: Victor C. ARIOLE
In a crisis of over-accumulation, capital begins to lose its value, and according to the driving logic of capitalism, this cannot be allowed to happen… Someone needs to step in to provide a way to mop-up the excess capital to funnel it into some kind of profitable investment. It is an iron law.
Nigeria is reported to be the second highest holder of Bitcoins in the whole world after USA, and Nigeria’s holding is about $566 million. It is also noted that one Bitcoin is valued at about
N16 million. In effect it is like investment tradable at the Stock Exchange like it is traded in competing Exchange in West Africa – BRVM in Cote d’Ivoire – where about 600,000 legally identifiable entities use it either as a Blockchain Technology product or whatever. Watching Chimezie’s programme on Channels Tv, she had contended that it is within the regulatory powers of SEC (Security and Exchange Commission) to regulate such investment portfolios as quotable on the Stock Exchange instead of the Central Bank of Nigeria (CBN) decreeing against it simply because IMF boss was raising concern of such investment not matching any industrial output from Nigeria, hence as either investment out of laundered money or as another means of funding terrorist activities.
IMF and World Bank, no doubt, know best how the wealth of the word circulates to a point that they know that for every wealth created, real or fictitious, a zero-sum game is always observed, and African sub-Sahara bears the greatest brunt of the suffering either as exploitation ground – as mineral resources and precious metals are taken away both overtly and covertly; Zamfara gold extraction, Niger-Delta Oil extraction, uranium mining, etc. Or human beings are deliberately meant to feel despondent as macro-economics in the hands of CBN, as IMF tool, call for stricter financial measures that make labour and entrepreneurship less attractive. Here the youths are targeted and their frustration leads to conflagration of the country like Arab spring, Malian upheaval and EndSars debacle.
Sometimes I had wondered how Nigerians survived the combined rulership of IBB and later Abacha; especially that of Abacha, as Nigeria turned a pariah nation, thriving without the probing eyes of the IMF and the World Bank. It turned out ironical, as it was later discovered that Nigeria’s wealth was indeed siphoned out of Nigeria under the watch of CBN; and that instead of seeing it as Abacha loot, it ought to be seen as Abacha saving money for Nigeria outside Nigeria’s shores for clandestine activities beyond the purview of IMF and the World Bank. What a childish assumption that the two institutions cannot see you!
So, for whatever intent, both IMF and World Bank know when “Mop-up of excess capital is funnelled into some kind of profitable investment”; clandestine arms’ purchase, to destabilise Africa, being part of such profitable investment.
Recently, the Minister of Health mentioned that $1million is needed to develop Nigeria’s own designed vaccine to tackle Corona–19 and no one seems to see the locked-in $566million crytocurrency or Blockchain technology investment held by Nigeria as capable of being a profitable investment that can make Nigeria soar, indeed, as the real giant of Africa.
Satoshi Nakamoto who launched that industry is very much trusted to a point that USA bought into it and it should not be now that young Nigerians who had been frustrated by lack of level playing ground in both employment opportunities or restricted expansion of elite mining and agro-allied activities, are turning to such ventures. Paying sovereign debts or interest on sovereign debts seem to be the greatest preoccupation of CBN and the reserve level the CBN keeps is the only thing that interest the two institutions who are not accountable to any law enacted by countries to keep the body and minds of their people safe. And Nigeria is the capital of poverty and it is intended to be palliated. Now CBN is asked to engineer raising VAT rate in Nigeria so as to shore up government saving toward paying debts or interest on debt as even government treasury bills seem not to be trusted any longer, no matter the wicked double digit yield they promise for “hedge fund” investors who are not better than those who ventured into blockchain technology in Nigeria.
Some of the youths I overheard discussing their investments in Bitcoins claim that it is safer to hedge against inflation for savings towards what they intend to do in two years as they have been promised that after two years it could be doubled. Others claim that they are investing in it to ensure paying for their migration fees to Canada or Australia in years to come. Imagine 1million Nigerian youths saving over N1million to pay for migration fees, and it happens annually and no one questions such fund repatriation, or organise useful work that could occupy than even if for 10-years programme.
That seems to be what happened, in different way, when IBB and Abacha were in power as Nigerian funds were repatriated to such a tune that over $35billion debt was claimed by Paris club and other creditors supported by IMF, and Nigerian Banks and Finance companies became the highest employers of labour. Almost half of the students I taught from 1992 – 2000 ended up working in the bank, finance companies or such related or derived works.
Money invested into cryptocurrency can engineer new jobs as acceptable by IMF the way they did in those IBB/Abacha years.
USA, the power that dominates the two institutions, and the number one economic power of the world, operates over $3trillion budget deficit greater than the GDP of the whole Africa, making Africa look like a suckling baby notwithstanding Africa bubbling youths that crave to be employed. Nigeria, alone, is estimated to have such in millions – possibly 60million.
And like Hickel said, to avoid having to confront domestic resistance as the youths and cryptocurrency investors are gearing up for, there is need to open up consumer markets, labour markets and investment markets that can absorb the youths in or outside Nigeria as most African space is hungry of investment, and cryptocurrency is partially assuaging that; though, somehow, insurgency activities seem to be driving such investment, whether in west Africa, central Africa or east Africa; and the IMF and World Bank could do better by detecting money funnelled to arms purchase by insurgents and not blockchain industry helping the youths to save for their future migration to Australia or Canada; still profitable to the West.
ARIOLE, Professor of French and Francophone Studies, University of Lagos