Tuesday 22 September 2015


Sometime in December 2014, the Central Bank of Nigeria (CBN) introduced some policies to rein-in currency speculation and round-tripping by FOREX dealers, who were in the habit of hoarding foreign currencies to create artificial demand. The CBN took the decision to curb speculative attacks on the Naira by these unscrupulous elements that were bent on taking advantage of the steep dip in global oil prices, and its recent measure to defend the naira and national reserves by exempting 41 items from the forex window. Since then aggrieved local and foreign collaborators have taken up arms against the CBN.

Only recently, the JP Morgan Index Team in a statement released to selected media groups disclosed its decision to delist Nigeria from its Government Bond Index by the end of October. This is in spite of the fact that Nigeria’s apex bank had, at every turn, explained its policy decisions in line with its code of transparency. Little wonder many analysts see JP Morgan action as either blackmail or disrespect or even both.

The reader may want to know: what is JP Morgan, a commercial bank among others, that, its assessment should be taken so seriously? How was Nigeria before 2012? And what is not working in Nigeria that justifies this action?  Do they really have the morals to arrive at that decision? While the World Bank and the IMF, the real managers of economies are laboriously pursuing developmental goals and building institutions around the world, the JP Morgans of this world are busy pursuing selfish commercial interest. 

The action veils their real intention, which is purely commercial interest. It is quite obvious that the JP Morgan index team has refused to acknowledge the structure of Nigeria’s peculiar economy cum the strangulating effect of the oil crisis. The investment bank has also refused to respect the actions so far taken by the CBN as necessary at this moment not to allow the economy to crash. What works in a particular country, may not work in another.

Since the CBN decided not to further devalue its currency, these neo-colonialists and their local collaborators have embarked on tailored-made criticism crafted to suit their commercial interest. Precarious as the situation is, with the federal executive council yet to be constituted to complement the efforts of the apex bank, the CBN has been managing the economy.

The unreasonable attacks started from The Economist and later Standards and Poors and now JP Morgan, which had earlier given notice, in January, to phase out Nigeria from its Government Bond for Emerging Markets (GBI-EM) for lack of liquidity in the economy. This is nothing but a demonstration of arrogance by the international financial institutions that cares for no one but their selfish interest alone. What really is the concern of the JP Morgan in forex issues, which is global and not peculiar to Nigeria? It had earlier given a target date of December 15, to decide on Nigeria, and therefore the unanswered question is – why the sudden change to September 15? More so that, the bank is known to deal and trade in bonds and this makes clear their interest.

Yes, we need development partners but not as determinants of our fate. We are peculiar people with rich heritage and intelligence. If I may ask, what have we really benefitted from their so-called economic agenda? If Nigeria and the CBN have decided to chart a new course for its people, who are the JP Morgans of this world to say otherwise? It is also interesting to note how every financial analyst, commentator, broker, institution, captains of industry and agencies within and outside Nigeria, especially in Europe and North America, is so fixated with Nigeria, and the call for devaluation of the Naira.

Quite disheartening too is the fact that some Nigerians, many of whom lack the grasp of what usually plays out in such game as to who stands to lose, if Naira is devalued, have joined the financial blackmail train in piling pressure on the Central Bank to devalue the Naira.

What product are we exporting that we need to devalue the Naira to create market for? Is it the crude oil that has driven its value underground? Inasmuch as many are at daggers drawn with Godwin Emefiele, the Governor of CBN and his team, every country has to do what it has to do to protect its economic interest, and Nigeria should not be railroaded into a western designed strategy that will end up impoverishing Nigerians and enriching the pocket of investors.

If Nigeria succumbs to the blackmail of international financial institutions and uninformed local analysts, the Naira will have a free fall and would not be worth more than what late Ugandan military leader, Idi Amin Dada, referred to as “toilet paper”. And recent was the case of the Zimbabwean dollar. Whoever is calling for the devaluation of the Naira has evil intentions as alluded to in press statement issued by the bank on the wake of the action by JP Morgan. 

As the statement said, “doing so would lead to an indeterminate depreciation of the Naira”. The consequence of this is dire, and should be left only to imaginations. Advocates of devaluation are not just what they are, but insensitive to the plight of many Nigerians who spend over 70% of their expendable income on food alone. Further devaluation of the currency will exacerbate the present high inflationary pressure, which will eventually erode whatever little gain the large population of the Nigerian masses, most of whom are already wallowing in abject poverty have, and this may trigger public unrest because of the abnormal high cost of food items that Nigerians are presently experiencing; the very worst time in history.

With this scenario playing out, the federal government should stop the usual rhetoric about economic diversification which stage we had long passed; rather it should radically diversify its source of income, and forge a strong partnership and collaborate with the monetary authority.

Let JP Morgan take its index elsewhere, as any promise made of a weaker Naira exchange rate that would promote industrial and economic growth is suspect. Though the CBN policies and its obstinacy to the call for devaluation may look quite unfriendly, but it is about patriotism and responsibility to protect our heritage, the Naira, reduce inflation, create jobs and grow the national reserves. 

No responsible country will heed the call for devaluation recommended by JP Morgan, given our economic vulnerability and weak productive base, and allow the Naira to crash to its own death. Supporters of JP Morgan’s misadventure to blackmail Nigeria into unprofitable devaluation to enable its cronies profit should understand that Nigerians are smart and intelligent to see through their selfish desire. Nigerians have resolved to carve a new and profitable course for economic renaissance. What the CBN needs from Nigerians now is support and understanding.

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