Tinubu at Chatham House
BY MORAKINYO OLUWADARE
The most recent publication by Chatham House, urging Nigeria to maintain a weakened naira for “economic competitiveness,” is not only misguided but also a stark reminder of the West’s historical exploitation of Africa under the guise of economic advice.
This so-called “cerebral” opinion is nothing more than a regurgitation of the same ill-fated policies that have kept sub-Saharan Africa, and Nigeria in particular, in a perpetual state of economic dependency and underdevelopment. Chatham House, like many Western institutions, has never truly meant well for Nigeria. Its recommendations are designed to perpetuate a neo-colonial economic order that benefits foreign interests at the expense of Nigeria’s sovereignty and the well-being of its citizens.
The historical context: A legacy of exploitation
Chatham House’s advice is eerily reminiscent of the Structural Adjustment Programs (SAPs) imposed on Nigeria in the 1980s by the International Monetary Fund (IMF) and the World Bank. These programs, which included currency devaluation, trade liberalization, and the removal of subsidies, were sold as necessary reforms for economic growth. Instead, they plunged Nigeria into deeper poverty, unemployment, and social unrest.
The naira, which traded at N0.60 to the dollar in 1980, plummeted to N22 by 1993, and today stands at nearly N1,500. The result? A crippled manufacturing sector, skyrocketing inflation, and a reliance on imports for even the most basic goods.
Chatham House’s current recommendation to keep the naira weak is a continuation of this exploitative agenda. By advocating for policies that prioritize foreign investors and multinational corporations over local industries and citizens, Chatham House is effectively ensuring that Nigeria remains a supplier of cheap raw materials and a market for expensive finished goods. This is not economic advice; it is economic sabotage.
The fallacy of depreciation as a tool for competitiveness
Chatham House argues that a weaker naira makes Nigeria more competitive by lowering export prices. However, this argument ignores the structural realities of Nigeria’s economy. Unlike countries like China or South Korea, which have robust manufacturing bases, Nigeria’s economy is heavily reliant on oil exports. A weaker naira does little to boost non-oil exports because Nigeria lacks the industrial capacity to produce value-added goods at scale.
Instead, depreciation simply increases the cost of imported machinery, raw materials, and essential goods, further stifling local production and exacerbating inflation.
Moreover, the claim that depreciation has improved Nigeria’s balance of payments is misleading. While the current account may show a surplus, this is largely due to reduced imports caused by the high cost of foreign exchange, not an increase in exports. This is not sustainable growth; it is economic contraction disguised as progress.
The human cost: Inflation and suffering
The most egregious flaw in Chatham House’s argument is its disregard for the human cost of its recommendations. Inflation in Nigeria has soared to 35%, with food prices rising even faster. The urban poor, who spend a significant portion of their income on imported essentials like food and fuel, are bearing the brunt of this crisis.
By advocating for policies that prioritise macroeconomic indicators over human welfare, Chatham House is effectively endorsing the impoverishment of millions of Nigerians.
This is not the first time Western institutions have prioritized economic metrics over people. The IMF’s austerity measures in the 1980s and 1990s led to widespread suffering across Africa, with no tangible benefits to show for it. Chatham House’s advice is a continuation of this cruel and exploitative tradition.
A better path: Lessons from the Asian tigers
If Nigeria is to escape its economic quagmire, it must look to the examples of the Asian Tigers—South Korea, Taiwan, Singapore, and Hong Kong—which transformed themselves from poor, agrarian economies into global powerhouses in just a few decades. These countries succeeded not by following Western prescriptions but by pursuing bold, independent strategies tailored to their unique circumstances. Here are some key lessons Nigeria can learn:
Strategic Industrial Policy: The Asian Tigers focused on developing specific industries with high growth potential, providing them with targeted support through subsidies, tax breaks, and infrastructure investment. Nigeria must do the same by identifying sectors where it has a comparative advantage, such as agriculture, textiles, and renewable energy, and providing them with the necessary support to thrive.
Investment in Human Capital: Education and skills development were central to the success of the Asian Tigers. Nigeria must prioritize education, particularly in science, technology, engineering, and mathematics (STEM), to build a skilled workforce capable of driving innovation and productivity.
Export-Led Growth: Unlike Chatham House’s recommendation to rely on a weak currency, the Asian Tigers focused on producing high-quality, value-added goods for export. Nigeria must invest in its manufacturing sector, improve product quality, and seek out new export markets to diversify its economy.
Strong Institutions and Governance: The Asian Tigers succeeded because they had strong, capable institutions that implemented policies effectively and minimized corruption. Nigeria must strengthen its institutions, improve transparency, and hold leaders accountable to ensure that resources are used efficiently and equitably.
Strategic Protectionism: The Asian Tigers did not open their markets indiscriminately. They used tariffs and other trade barriers to protect nascent industries until they were strong enough to compete globally. Nigeria should adopt a similar approach, using strategic protectionism to shield local industries from unfair competition while they grow and mature.
Conclusion: Rejecting neo-colonial exploitation
Chatham House’s advice is not in Nigeria’s best interest; it is a continuation of the West’s long history of economic exploitation. Nigeria must reject these neo-colonial prescriptions and chart its own course, drawing inspiration from the Asian Tigers and other successful models of development.
By investing in its people, industries, and institutions, Nigeria can achieve sustainable, inclusive growth that benefits all its citizens—not just foreign investors and multinational corporations.
The time for blind adherence to Western advice is over. Nigeria must seize control of its economic destiny and build a future defined by prosperity, sovereignty, and dignity.
Morakinyo Oluwadare, an advocate for African self-determination, can be contacted via [email protected]
Advertisement
Views expressed by contributors are strictly personal and not of TheCable.
Add a comment