If symptoms persist after one year…

Time changes everything. My barber voted for change last year. Which means he voted for Candidate Muhammadu Buhari. After Buhari’s inauguration and the stable power supply that followed, he felt justified. “Power has become regular in just a few months,” he said triumphantly. Over time, though, he has transformed from Buhari’s admirer to critic. Last week, I drew his attention to the improved power supply in our neighbourhood. “Are you happy with Baba now?” I asked, partly in jest. He replied: “Oga, it has nothing to do with Buhari! Power always improves during the rainy season!” In just one year, his tune has changed.

Time also flies. It is already over a year that oil prices started tumbling mercilessly and Mr. Godwin Emefiele, the governor of the Central Bank of Nigeria (CBN), came up with the “demand management” policy to restrict the demand for forex and protect our reserves from haemorrhaging. He produced a list of 41 items, including toothpicks, starch and Indian incense, which he labelled “not eligible” for forex at the official window. His publicly stated aim was to encourage local production of many of those “not eligible” items, boost agriculture, encourage industrial growth and tackle unemployment in the land. “Buy Made in Nigeria” became a national anthem.

One year after, how well has the policy worked? The jury is still out. As some manufacturers are smiling to the bank, some are crying to the grave. True, some products we used to import are now being produced at home, but there is a natural limit to what monetary policy alone can do in this circumstance. A factory may close down because of the power situation. It could be because cheaper goods are being smuggled into the country. Factories could also be failing because of the general state of infrastructure. The business environment could be too hostile to complement monetary policy. What then happens is that we do not get the results we desire.

After all, monetary policy, which the central bank controls, is never going to be the driver of development. Economists would say monetary policy is “residual” — it is supposed to be applied AFTER other policies are in place. You have your fiscal and trade policies, and then the bank will use the key rates to help you achieve your goals. For instance, if your plan is to spend very big — on infrastructure, wages, or whatever — the bank will look at the impact on inflation and act accordingly through monetary policy instruments. If you are targeting export, the bank can play with the exchange rate. But monetary policy can never stand in for fiscal policies.

To be sure, when Emefiele came up with the “demand management” policy last year, I was one of those who criticised him. My point was very direct: the CBN cannot ban imports — that is the job of Buhari’s cabinet. Therefore, those items would still be imported and pressure would shift to the black market, thereby hurting the naira and creating room for arbitrage. Experts persistently asked the federal government to make policy statements to encourage investment. But there was no cabinet for months. At some point, I advised Buhari, through this column, to appoint an economic adviser to fill the vacuum, pending the composition of the cabinet. No dice.

A major problem area has been the exchange rate. I remember that Emefiele started adjusting it long before it became a topic of public debate. Between November 2014 and February 2015, the official rate moved from N155/$1 to N168/$1 before finally landing at N197/$1. Therefore, it was not as if the CBN did nothing in response to the falling forex inflow. I also remember that for 16 months, Emefiele held on to N197/$1 as we debated and argued and quarrelled over devaluation. In June 2016, he started to let go under the “flexible” exchange rate regime as forex inflow fell to as low as $400m in a month, compared to the glorious height of $3.6bn not too long ago.

But as the CBN finally floated the naira, the national currency started sinking. I can’t even recognise it again. Yet, the investors are not rushing down to Nigeria. Why? It is possible they think the CBN acted too late or the market is still not as they want it. But rather than for us to continue this blame game, my argument today is that since the symptoms have persisted after more than one year of CBN-led economic management, the managers of the economy will now have to sit down and decisively take control of the situation. We cannot rely on monetary policy alone to bail us out. The fiscal spending end of the bargain has become a matter of urgency. The TSA vault must be unlocked.

Since the foreign investors are foot-dragging, we can at least boost the local economy through fiscal spending. Our own banks do not even seem to have much faith in the economy as they continue to lend little or nothing to critical sectors, preferring instead to be frolicking with forex. Let the government implement economic policies to drive GDP growth. Let the budgetary allocations be released to stimulate consumption. When you stimulate consumption, economic activities will pick up. We are in September and there doesn’t seem to be much going on in the area of implementing the 2016 budget. Experts estimate that fiscal spending can activate up to 60% of the GDP.

Evidently, we need an overall economic agenda that is all-inclusive and well-coordinated. All hands must be on deck. We need input from all sectors and all segments of the economy, not just some ministers and consultants. There are too many bits and pieces coming from the government that we cannot weave together. As I write this, I cannot in true conscience say I fully understand the trade policies of this administration. Are we focusing on import substitution? Is it export-led growth? Is it both? Do we want to use tariffs to drive trade and industry? Is it subsidies? Is it exchange rate? Each policy thrust has its own dynamics.

We all know that power supply is non-negotiable in industrial growth. Are we expecting monetary policy to produce electricity? If you register a business and the permits to start production are taking ages to process, how does that help the economy? Have you ever tried to register a table water business or bakery? By the time NAFDAC, council and state government officials pounce on you with all kinds of fees, levies and demands, you will need extra courage to go ahead. You invest in rice production and cheaper ones are being effortlessly smuggled into Nigeria. Your investment is in trouble. All these actions and inactions are damaging the economy.

Finally — and very, very crucial in these troubled times — what is the government policy towards the Niger Delta militants? The urgent solution to our forex-induced economic crunch lies in what we do in the creeks. Do we want to pursue peace or we want to go to war? Both have good and bad sides. If we give in to the doves and pursue peace, it could be the fastest route to addressing the forex scarcity which is defacing the naira and crippling the economy, with the threat of another fuel price hike lurking in the corner. If we achieve peace in the short run and production rises to 2.2mbpd at the current price of $48 per barrel, we would do just fine. Power supply will also improve.

But the hawks would say negotiating with “criminals” will only weaken the state and create a permanent room for blackmail. The solution, they insist, is for the military to bomb the Niger Delta and flush out the boys so that the state can reassert itself. The good part of this position is that sovereignty will return to the government in the long run. The other side is twofold: our forex-cum-economic and power crises will continue in the short run and, who knows, the war may take longer to win, as we have seen in the case of Boko Haram. Buhari’s final decision is very critical to the resolution of this economic impasse.

My barber, by the way, is happy that power has improved. He is buying less petrol to fuel his generator and now has more money in his pocket. What this tells me is that this economic hardship can be lightened with even little things. Most of the economy managers know what to do. They cannot rely on Buhari’s body language or sign language alone. That cannot be an alternative to sound economic policies. The economy is starved of oxygen, and I mean funds. They should tell Buhari the home truth. As witty film producer Samuel Goldwyn would say, “I don’t want yes-men around me. I want everyone to tell the truth, even if it costs them their jobs.”

AND FOUR OTHER THINGS…

INCONCLUSIVE INEC

A few hours after saying it would go ahead with the Edo governorship election, the Independent National Electoral Commission (INEC) suddenly made a U-turn and postponed it. There is always something inconclusive about this INEC since Professor Attahiru Jega left. I do not for one minute think it is purely coincidental that INEC has not shown any sign of improvement since the new leadership took charge. I thought the 2015 general election, despite its flaws, was easily one of the best in our history — and all we needed to do was build on the success, rather than regress. But, you know, this is the way we are. Shame.

DÉJÀ VU

2014: Pro-Jonathan group clashes with members of the Bring Back Our Girls movement at Unity Fountain, Abuja. 2016: Pro-Buhari group clashes with members of the Bring Back Our Girls movement at Unity Fountain, Abuja. 2014: AIG Joseph Mbu warns BBOG “enough is enough”. 2016: IGP Ibrahim Idris warns BBOG “enough is enough”. 2015: Jonathan sympathisers say BBOG is working for his opponents. 2016: Buhari sympathisers say BBOG is working for his opponents. Wow. Why do I have this funny feeling I have seen and heard and read all these before? I get it: the more things seem to change, the more they remain the same. Replay.

VALUE CHANGE

In my teenage years, my dream was to visit Jamaica. I never knew the country was riddled with poverty and gun violence. All I heard from Jamaicans was how beautiful their country was. Bob Marley spoke lovingly about Trench Town. Yellowman affectionately sang “Jamaica nice”. Compare that to Eedris Abdulkareem’s “Nigeria jaga jaga”. I understand our frustration with our country, but it remains our country nonetheless. We must see beyond our current circumstances and dream of a great country. Change can start with each and every one of us. It’s not about President Buhari, Alhaji Lai Mohammed or APC. It’s about the future of our children. Introspection.

EID MUBARAK

For the first time in 14 years, I did not get a single ram gift for the eid-al-adha. And, weird as it sounds, I love it. I’m also not expecting any turkey gift at Christmas and I will be fine with it too. It is part of the adjustment we must make as we begin to cut our coats according to our clothes. We have been too used to all these gifts in Nigeria that we have come to conclude that they are our birthright. We love free lunch. I just hope we will keep to this newfound, if austerity-induced, modesty and keep it up when the economy improves. The crunch notwithstanding, I wish my Muslim friends a very happy and reflective eid. Felicitations.