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Post by omohayek on Jan 28, 2016 23:17:26 GMT
Shymmex, OmoOba, Iya Niyen!, Omoluabi, dansoye1, Belmot, Omo Oba of the Source, Her Highness, IrekeOnibudo, oduabachanal, Honorebu, AgbongboAkala, Ogbeni Ogunnaike, colonial pikin, ajanaku, imodoyeI've said repeatedly that the problem with Buhari isn't that he's concerned about corruption, but that apart from chasing down (some) high-profile looters, he isn't bringing any new ideas to the table; nothing Buhari has said so far indicates that he learned anything about economics in the 30 years he was out of power. The Economist evidently agrees: I have emphasized the most important passages in bold. What's that popular definition of "madness" again? "Doing the same thing again and again and expecting different results". Why Buhari expects policies which were a disaster in 1984 to work today is a mystery I can't fathom. Last time around Buhari had the excuse of Babangida's coup to save him from having to deal with the full impact of his wrong-headed economic policies, but this time "Sai Baba" probably won't be so lucky, and Buhari will only be able to blame GEJ and company for so long before even his supporters get tired of the excuses.
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Post by Ogbeni Ogunnaike on Jan 28, 2016 23:19:32 GMT
Shymmex , OmoOba , Iya Niyen! , Omoluabi , dansoye1 , Belmot , Omo Oba of the Source , Her Highness , IrekeOnibudo , oduabachanal , Honorebu , AgbongboAkala , Ogbeni Ogunnaike , colonial pikin , ajanaku , imodoye I've said repeatedly that the problem with Buhari isn't that he's concerned about corruption, but that apart from chasing down (some) high-profile looters, he isn't bringing any new ideas to the table; nothing Buhari has said so far indicates that he learned anything about economics in the 30 years he was out of power. The Economist evidently agrees: I have emphasized the most important passages in bold. I agree.... And it is quite unfortunate.
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Post by Honorebu on Jan 28, 2016 23:22:18 GMT
Eeeerm omohayek, but what of the guys he appointed? At least he has ministers.Me think those are the people we should be pointing fingers at
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Post by omohayek on Jan 28, 2016 23:30:46 GMT
Eeeerm omohayek , but what of the guys he appointed? At least he has ministers.Me think those are the people we should be pointing fingers at The thing is that no matter how competent Buhari's ministers are, the man at the top is not the kind to really listen to anyone else's advice. Look at how he responded to Kachikwu's suggestions about privatizing the refineries, Soludo and Sanusi's advice on devaluing, or even Tinubu's public statement about abolishing the wasteful petrol subsidies. I'm even hearing that Buhari threatened to fire Adeosun and Udoma in the UAE because they dared suggest Buhari was signing a lop-sided trade deal in his over-eagerness to get an extradition agreement! It does no good to pick good people to work for you if you won't let them do what they think is right. That's exactly how Ngozi Okonjo-Iweala allowed her reputation to be destroyed when GEJ refused to implement any of the sensible suggestions she made to him about saving for a rainy day. Buhari's problem isn't corruption like "Fortunato", but the end result is the same - his ministers will be made to carry the blame because their president was too stubborn and too set in his militaristic ways to listen to what they had to say.
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Post by Honorebu on Jan 28, 2016 23:35:22 GMT
Eeeerm omohayek , but what of the guys he appointed? At least he has ministers.Me think those are the people we should be pointing fingers at The thing is that no matter how competent Buhari's ministers are, the man at the top is not the kind to really listen to anyone else's advice. Look at how he responded to Kachikwu's suggestions about privatizing the refineries, Soludo and Sanusi's advice on devaluing, or even Tinubu's public statement about abolishing the wasteful petrol subsidies. I'm even hearing that Buhari threatened to fire Adeosun and Udoma in the UAE because they dared suggest Buhari was signing a lop-sided trade deal in his over-eagerness to get an extradition agreement! It does no good to pick good people to work for you if you won't let them do what they think is right. That's exactly how Ngozi Okonjo-Iweala allowed her reputation to be destroyed when GEJ refused to implement any of the sensible suggestions she made to him about saving for a rainy day. Buhari's problem isn't corruption like "Fortunato", but the end result is the same - his ministers will be made to carry the blame because their president was too stubborn and too set in his militaristic ways to listen to what they had to say. Toh! waala wa ooo
Well, I'm waiting to see how far his rigidity takes him
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Post by IrekeOnibudo on Jan 29, 2016 0:03:57 GMT
Shymmex , OmoOba , Iya Niyen! , Omoluabi , dansoye1 , Belmot , Omo Oba of the Source , Her Highness , IrekeOnibudo , oduabachanal , Honorebu , AgbongboAkala , Ogbeni Ogunnaike , colonial pikin , ajanaku , imodoye I've said repeatedly that the problem with Buhari isn't that he's concerned about corruption, but that apart from chasing down (some) high-profile looters, he isn't bringing any new ideas to the table; nothing Buhari has said so far indicates that he learned anything about economics in the 30 years he was out of power. The Economist evidently agrees: I have emphasized the most important passages in bold. What's that popular definition of "madness" again? "Doing the same thing again and again and expecting different results". Why Buhari expects policies which were a disaster in 1984 to work today is a mystery I can't fathom. Last time around Buhari had the excuse of Babangida's coup to save him from having to deal with the full impact of his wrong-headed economic policies, but this time "Sai Baba" probably won't be so lucky, and Buhari will only be able to blame GEJ and company for so long before even his supporters get tired of the excuses. I think the point at which GEJites on NL stopped tagging me as an APC apparatchik was the day I engaged Obiageli in a long running fastoff on Buhari/Buharinomics. Up on till that time, my opposition to Jonathan's lackluster administration had marked me out as an unabashed APC mouthpiece - thanks to the pedestrian reasoning which beclouded logic. omohayek , I am afraid our people (Nigerians) are simply going to have to grind their teeth through this one. Those of us who understood that Buhari's fidelity to dated economic policies was as unshakable as it was 30 years ago, had our opinions drown out by the cacophony of anti-corruption voices. Our repeated pleas for a more viable and less didactic Presidential candidate fell on deaf ears, mainly because they felt that our nation had gone almost beyond the point of salvation. To be clear, I think Buhari does mean well. But with some appreciation of his antecedents, I also think his reticence to focus on the current hemorrhage is partly informed by sectional leanings. Who does not know that public opinion in the Core North - which has been beleaguered to the point of outright regression, in successive years - is unlikely to be swayed by the grumblings of foreign investors looking to offload assets?
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Post by Honorebu on Jan 29, 2016 0:14:30 GMT
Ha! geesi po
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Post by ajanaku on Jan 29, 2016 4:34:43 GMT
First off, I'm not his fan; I think a younger, astute, brilliant man would have been better. I voted him 'cos he was the next best option.
But I think we need to give him some more time. He came in at a very wrong time - dwindling crude oil prices, the Naira passing through its darkest times, a looted treasury, a tribally divided country, et al.
I also think he's the best man for the job considering his zero tolerance to corruption which is the main bane of this fucked up country...
Ẹ jẹ ki a fun baba yẹn ni time diẹ si.
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Post by omohayek on Jan 29, 2016 8:10:09 GMT
First off, I'm not his fan; I think a younger, astute, brilliant man would have been better. I voted him 'cos he was the next best option. But I think we need to give him some more time. He came in at a very wrong time - dwindling crude oil prices, the Naira passing through its darkest times, a looted treasury, a tribally divided country, et al. I also think he's the best man for the job considering his zero tolerance to corruption which is the main bane of this fucked up country... Ẹ jẹ ki a fun baba yẹn ni time diẹ si.Unfortunately I can't share your optimism. How much more time does Buhari need to understand that his statist policies won't work, if 30 years of idle time weren't enough? Shouldn't he have spent a little of that copious free time attending classes or at least reading up on economics and development? I find it hard to believe that it's now, when he's faced with the daily challenges of running a huge, dysfunctional country, that Buhari will finally sit down to do the homework he never bothered with in 3 decades out of power. I get where you're coming from about Buhari being the "best man for the job", considering the only other man for the job - Jonathan - was both utterly corrupt and incompetent. However, saying Buhari is better than Jonathan is really like saying malaria is better than AIDS: both are terrible diseases which can kill you if left untreated. Buhari may say he's serious about fighting corruption, but the problem is that (1) his corruption battle has so far been entirely partisan and limited in scope, (2) he has done absolutely nothing to rein in the incentives to corruption throughout Nigerian politics and life in general. As I've said before, Nigerian corruption is a systemic issue that affects society at all levels, not just the big men in Abuja, and as such it needs systemic policies that attack its root causes. Pass policies that change people's incentives and you drain the pool of corruption from the source: selective, one-off campaigns like Buhari's simply don't work. It is instructive that up to the 1960s Singapore used to be notorious for corruption, but is now known to have one of the least corrupt societies on the planet. What made the difference? Better pay for public employees, reining back the public sector in general, a strictly merit-based approach to hiring and promoting, and rigorous monitoring of public sector workers' performance. Do you see Buhari doing any of these things? Not only do I not see Buhari making any changes that will have a truly lasting impact on most Nigerian corruption, I don't think he can make such changes even if he knows what they should be, for the simple reason that his northern constituency would be most affected (as IrekeOnibudo has already noted). Who would lose out the most in Nigeria if most of the useless parastatals were dismantled, most sectors of the economy were deregulated, most protectionist barriers dismantled, and FDI strongly encouraged? The less-qualified northerners who depend on "federal character" quotas to find pretend jobs in Nigeria's bloated public sector, and the northern political elites who've made their fortunes by using their contacts to extract government patronage through inflated contracts, import quotas and sweetheart tariffs (Aliko Dangote being the most notorious such character).
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Post by ajanaku on Jan 30, 2016 10:48:41 GMT
First off, I'm not his fan; I think a younger, astute, brilliant man would have been better. I voted him 'cos he was the next best option. But I think we need to give him some more time. He came in at a very wrong time - dwindling crude oil prices, the Naira passing through its darkest times, a looted treasury, a tribally divided country, et al. I also think he's the best man for the job considering his zero tolerance to corruption which is the main bane of this fucked up country... Ẹ jẹ ki a fun baba yẹn ni time diẹ si.Unfortunately I can't share your optimism. How much more time does Buhari need to understand that his statist policies won't work, if 30 years of idle time weren't enough? Shouldn't he have spent a little of that copious free time attending classes or at least reading up on economics and development? I find it hard to believe that it's now, when he's faced with the daily challenges of running a huge, dysfunctional country, that Buhari will finally sit down to do the homework he never bothered with in 3 decades out of power. I get where you're coming from about Buhari being the "best man for the job", considering the only other man for the job - Jonathan - was both utterly corrupt and incompetent. However, saying Buhari is better than Jonathan is really like saying malaria is better than AIDS: both are terrible diseases which can kill you if left untreated. Buhari may say he's serious about fighting corruption, but the problem is that (1) his corruption battle has so far been entirely partisan and limited in scope, (2) he has done absolutely nothing to rein in the incentives to corruption throughout Nigerian politics and life in general. As I've said before, Nigerian corruption is a systemic issue that affects society at all levels, not just the big men in Abuja, and as such it needs systemic policies that attack its root causes. Pass policies that change people's incentives and you drain the pool of corruption from the source: selective, one-off campaigns like Buhari's simply don't work. It is instructive that up to the 1960s Singapore used to be notorious for corruption, but is now known to have one of the least corrupt societies on the planet. What made the difference? Better pay for public employees, reining back the public sector in general, a strictly merit-based approach to hiring and promoting, and rigorous monitoring of public sector workers' performance. Do you see Buhari doing any of these things? Not only do I not see Buhari making any changes that will have a truly lasting impact on most Nigerian corruption, I don't think he can make such changes even if he knows what they should be, for the simple reason that his northern constituency would be most affected (as IrekeOnibudo has already noted). Who would lose out the most in Nigeria if most of the useless parastatals were dismantled, most sectors of the economy were deregulated, most protectionist barriers dismantled, and FDI strongly encouraged? The less-qualified northerners who depend on "federal character" quotas to find pretend jobs in Nigeria's bloated public sector, and the northern political elites who've made their fortunes by using their contacts to extract government patronage through inflated contracts, import quotas and sweetheart tariffs (Aliko Dangote being the most notorious such character). I still feel Buhari is a better option... Well, I'd have loved to see him extend his anti-corruption drives to the APC camp but I wouldn't blame him for not doing so, as it would amount to biting the hands that fed him. If you were in his shoes, would you probe Crooks like Amaechi, Fashola and Tinubu knowing they contributed immensely in making you President? I think Buhari is fully cognizant of the thieving nature of some of his cronies and ministers, but you know at times, you just have to fuck laws, ethics and principles... I totally agree with you on the Northern agenda sha. Those people up there are nothing but parasites; contributing virtually nothing and benefiting the most. The 1914 amalgamation is one big mistake. Lord Lugard no try at all....
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Post by OmoOba on Jan 30, 2016 11:50:06 GMT
omohayek , in all honesty, I think something MUST be done about our reliance on imports and oil.
If we don't fix it, we will always have this issue. Maybe Buhari could have gone about it in a different way but it is a difficult task that must be completed.
It is time to think about what else we can export besides brent; what we can produce locally and possibly export; what else we could do with our natural resources that would be of interest to the global market.
Currently, we do not have our destiny in our hands and we need to rectify that.
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Post by omohayek on Jan 30, 2016 12:32:25 GMT
omohayek , in all honesty, I think something MUST be done about our reliance on imports and oil.
If we don't fix it, we will always have this issue. Maybe Buhari could have gone about it in a different way but it is a difficult task that must be completed.
It is time to think about what else we can export besides brent; what we can produce locally and possibly export; what else we could do with our natural resources that would be of interest to the global market.
Currently, we do not have our destiny in our hands and we need to rectify that.
The thing is, the reasons for the decline of Nigeria's non-oil exports have nothing to do with the "fixes" Buhari is attempting. Remember that Nigeria had a thriving agricultural sector right up until the civil war, and manufacturing was also doing well (witness the textile mills of the north). What killed Nigeria's non-oil economy was the resource curse, and in particular, Dutch disease. The influx into the Nigerian economy of huge amounts of oil money destroyed the international competitiveness of the agricultural and manufacturing sectors by raising incomes well above productivity levels: consequently, it became cheaper to import even the items we used to be exporters of. The Dutch disease effect has damaged the Nigerian economy every time there has been a strong spike in the price of oil, because instead of doing what better run countries do, which is to protect their domestic economies by saving the extra income in a sovereign wealth fund, we always proceed to spend all the extra money as if the good days will last forever. It's worth noting that the last time around, it was the very same APC which gave us Buhari that argued against Okonjo-Iweala's attempt to set up a Nigerian sovereign wealth fund. How can one expect good economic management to come of such people? Buhari's fixation with pretending that the Naira is stronger than it really is will not help Nigeria's domestic agriculture or manufacturing in the slightest. If anything, it weakens these sectors in two ways: the import restrictions prevent manufacturers from obtaining inputs they need for their business, while discouraging crucial foreign investment as foreign investors don't want to be caught out by the devaluation that will inevitably happen. I say "inevitably" because the CBN has already spent $9 billion of Nigeria's $30 billion foreign reserves on this pointless policy, and once the remaining $21 billion is gone the devaluation will have to happen: the only problem is that without any foreign reserves, Nigeria will probably suffer a major financial crisis that will require emergency support from the IMF and/or World Bank. All the above is to say that from the viewpoint of any economist, Buhari's policies are shockingly stupid, no matter how well meant, and it is guaranteed that they will lead to disaster if maintained.
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Post by OmoOba on Jan 31, 2016 11:35:00 GMT
omohayek , in all honesty, I think something MUST be done about our reliance on imports and oil.
If we don't fix it, we will always have this issue. Maybe Buhari could have gone about it in a different way but it is a difficult task that must be completed.
It is time to think about what else we can export besides brent; what we can produce locally and possibly export; what else we could do with our natural resources that would be of interest to the global market.
Currently, we do not have our destiny in our hands and we need to rectify that.
The thing is, the reasons for the decline of Nigeria's non-oil exports have nothing to do with the "fixes" Buhari is attempting. Remember that Nigeria had a thriving agricultural sector right up until the civil war, and manufacturing was also doing well (witness the textile mills of the north). What killed Nigeria's non-oil economy was the resource curse, and in particular, Dutch disease. The influx into the Nigerian economy of huge amounts of oil money destroyed the international competitiveness of the agricultural and manufacturing sectors by raising incomes well above productivity levels: consequently, it became cheaper to import even the items we used to be exporters of. The Dutch disease effect has damaged the Nigerian economy every time there has been a strong spike in the price of oil, because instead of doing what better run countries do, which is to protect their domestic economies by saving the extra income in a sovereign wealth fund, we always proceed to spend all the extra money as if the good days will last forever. It's worth noting that the last time around, it was the very same APC which gave us Buhari that argued against Okonjo-Iweala's attempt to set up a Nigerian sovereign wealth fund. How can one expect good economic management to come of such people? Buhari's fixation with pretending that the Naira is stronger than it really is will not help Nigeria's domestic agriculture or manufacturing in the slightest. If anything, it weakens these sectors in two ways: the import restrictions prevent manufacturers from obtaining inputs they need for their business, while discouraging crucial foreign investment as foreign investors don't want to be caught out by the devaluation that will inevitably happen. I say "inevitably" because the CBN has already spent $9 billion of Nigeria's $30 billion foreign reserves on this pointless policy, and once the remaining $21 billion is gone the devaluation will have to happen: the only problem is that without any foreign reserves, Nigeria will probably suffer a major financial crisis that will require emergency support from the IMF and/or World Bank. All the above is to say that from the viewpoint of any economist, Buhari's policies are shockingly stupid, no matter how well meant, and it is guaranteed that they will lead to disaster if maintained. Sir, I agree with you on the reasons/causes we are where we are today but what we should be looking at is HOW we get ourselves out of the current mess. if we don't put a long-term fix in place, we could be going through this again in a few years and before you know it, it becomes a vicious circle.
Whilst I agree that devaluation is inevitable and should be done sooner than later, I also want to see policies put in place that would ensure we don't get to the same point in the not too distant future.
Everyone keeps talking about the import restrictions but I don't know if anyone has actually had a look at the list. There is nothing on that list that we can't/aren't produce/producing locally. Why then are we so fixated on everything foreign? Our reliance on imports and all things foreign is not sustainable, not if we are serious about developing and creating a stable economy. Granted it would be painful in the short term but in my opinion, the long term benefits (if properly implemented) far outweigh the pain we are experiencing.
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Post by omohayek on Jan 31, 2016 13:53:35 GMT
The thing is, the reasons for the decline of Nigeria's non-oil exports have nothing to do with the "fixes" Buhari is attempting. Remember that Nigeria had a thriving agricultural sector right up until the civil war, and manufacturing was also doing well (witness the textile mills of the north). What killed Nigeria's non-oil economy was the resource curse, and in particular, Dutch disease. The influx into the Nigerian economy of huge amounts of oil money destroyed the international competitiveness of the agricultural and manufacturing sectors by raising incomes well above productivity levels: consequently, it became cheaper to import even the items we used to be exporters of. The Dutch disease effect has damaged the Nigerian economy every time there has been a strong spike in the price of oil, because instead of doing what better run countries do, which is to protect their domestic economies by saving the extra income in a sovereign wealth fund, we always proceed to spend all the extra money as if the good days will last forever. It's worth noting that the last time around, it was the very same APC which gave us Buhari that argued against Okonjo-Iweala's attempt to set up a Nigerian sovereign wealth fund. How can one expect good economic management to come of such people? Buhari's fixation with pretending that the Naira is stronger than it really is will not help Nigeria's domestic agriculture or manufacturing in the slightest. If anything, it weakens these sectors in two ways: the import restrictions prevent manufacturers from obtaining inputs they need for their business, while discouraging crucial foreign investment as foreign investors don't want to be caught out by the devaluation that will inevitably happen. I say "inevitably" because the CBN has already spent $9 billion of Nigeria's $30 billion foreign reserves on this pointless policy, and once the remaining $21 billion is gone the devaluation will have to happen: the only problem is that without any foreign reserves, Nigeria will probably suffer a major financial crisis that will require emergency support from the IMF and/or World Bank. All the above is to say that from the viewpoint of any economist, Buhari's policies are shockingly stupid, no matter how well meant, and it is guaranteed that they will lead to disaster if maintained. Sir, I agree with you on the reasons/causes we are where we are today but what we should be looking at is HOW we get ourselves out of the current mess. if we don't put a long-term fix in place, we could be going through this again in a few years and before you know it, it becomes a vicious circle.
Whilst I agree that devaluation is inevitable and should be done sooner than later, I also want to see policies put in place that would ensure we don't get to the same point in the not too distant future.
Everyone keeps talking about the import restrictions but I don't know if anyone has actually had a look at the list. There is nothing on that list that we can't/aren't produce/producing locally. Why then are we so fixated on everything foreign? Our reliance on imports and all things foreign is not sustainable, not if we are serious about developing and creating a stable economy. Granted it would be painful in the short term but in my opinion, the long term benefits (if properly implemented) far outweigh the pain we are experiencing.
I've explained at length elsewhere on here why I don't think banning imports of any items is a good thing, even if they can be produced locally. The long and short of it is that (1) local and foreign goods may not be substitutable, (2) we may not actually have a comparative advantage in producing said items, raising costs for any businesses which require the items as inputs, (3) import bans breed corruption, by giving politicians opportunities to hand out exemptions to allies, and encouraging smuggling to evade the bans. Simply allowing the currency to devalue achieves the same objective of discouraging imports without having any of the bad effects I've listed above, which is why economists prefer it. As for preventing the hollowing out of Nigerian domestic producers going forward, the right policies to take are actually not difficult to figure out. The real problem is getting any Nigerian government to adopt these policies and then actually stick to them when oil prices skyrocket. - Stop trying to use the government to pick winners and losers. Abolish all protectionist barriers to trade and set a low, uniform tariff. This will drastically reduce the scope for political corruption, and discourage smuggling.
- Properly insulate the Nigerian domestic economy from the effects of oil price volatility, by diverting any income above a low price (e.g. $15/barrel) into the Sovereign Wealth Fund. Do not spend the SWF principal under any circumstances, but allow for interest to be used to help balance the budget only during recessionary periods.
- Grant the CBN real independence, after setting it a fixed annual inflation target (e.g. 3 percent). The CBN will be empowered to use standard tools such as interest rates and reserve requirements to meet the target, and no President will be allowed to interfere with its operations, or even dismiss the CBN board members.
- Enact a budgetary framework for both the FG and the states, requiring them to balance their budgets over a fixed economic cycle: surpluses will be required during booms, to finance deficit spending during bad years.
- Strengthen the abilities of an independent national statistics organization, to provide the necessary figures to guide the budgeting process I've mentioned in point 4.
Believe it or not, none of the items I've listed here will be new or shocking amongst Nigeria's political elite. I know for a fact that at least SLS, Okonjo-Iweala, Soludo and El-Rufai have pushed for such policies in the past, but their calls have gone nowhere. The problem is not that Nigeria lacks the expertise to solve its problems, but that most Nigerian politicians only care about self-enrichment and winning another term in office, so they ignore doing the right thing in favor of their own immediate goals. I don't see Buhari's policies doing anything to alter this reality in the long run.
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Post by OmoOba on Jan 31, 2016 19:52:04 GMT
Sir, I agree with you on the reasons/causes we are where we are today but what we should be looking at is HOW we get ourselves out of the current mess. if we don't put a long-term fix in place, we could be going through this again in a few years and before you know it, it becomes a vicious circle.
Whilst I agree that devaluation is inevitable and should be done sooner than later, I also want to see policies put in place that would ensure we don't get to the same point in the not too distant future.
Everyone keeps talking about the import restrictions but I don't know if anyone has actually had a look at the list. There is nothing on that list that we can't/aren't produce/producing locally. Why then are we so fixated on everything foreign? Our reliance on imports and all things foreign is not sustainable, not if we are serious about developing and creating a stable economy. Granted it would be painful in the short term but in my opinion, the long term benefits (if properly implemented) far outweigh the pain we are experiencing.
I've explained at length elsewhere on here why I don't think banning imports of any items is a good thing, even if they can be produced locally. The long and short of it is that (1) local and foreign goods may not be substitutable, (2) we may not actually have a comparative advantage in producing said items, raising costs for any businesses which require the items as inputs, (3) import bans breed corruption, by giving politicians opportunities to hand out exemptions to allies, and encouraging smuggling to evade the bans. Simply allowing the currency to devalue achieves the same objective of discouraging imports without having any of the bad effects I've listed above, which is why economists prefer it. As for preventing the hollowing out of Nigerian domestic producers going forward, the right policies to take are actually not difficult to figure out. The real problem is getting any Nigerian government to adopt these policies and then actually stick to them when oil prices skyrocket. - Stop trying to use the government to pick winners and losers. Abolish all protectionist barriers to trade and set a low, uniform tariff. This will drastically reduce the scope for political corruption, and discourage smuggling.
- Properly insulate the Nigerian domestic economy from the effects of oil price volatility, by diverting any income above a low price (e.g. $15/barrel) into the Sovereign Wealth Fund. Do not spend the SWF principal under any circumstances, but allow for interest to be used to help balance the budget only during recessionary periods.
- Grant the CBN real independence, after setting it a fixed annual inflation target (e.g. 3 percent). The CBN will be empowered to use standard tools such as interest rates and reserve requirements to meet the target, and no President will be allowed to interfere with its operations, or even dismiss the CBN board members.
- Enact a budgetary framework for both the FG and the states, requiring them to balance their budgets over a fixed economic cycle: surpluses will be required during booms, to finance deficit spending during bad years.
- Strengthen the abilities of an independent national statistics organization, to provide the necessary figures to guide the budgeting process I've mentioned in point 4.
Believe it or not, none of the items I've listed here will be new or shocking amongst Nigeria's political elite. I know for a fact that at least SLS, Okonjo-Iweala, Soludo and El-Rufai have pushed for such policies in the past, but their calls have gone nowhere. The problem is not that Nigeria lacks the expertise to solve its problems, but that most Nigerian politicians only care about self-enrichment and winning another term in office, so they ignore doing the right thing in favor of their own immediate goals. I don't see Buhari's policies doing anything to alter this reality in the long run. I agree with your proffered solutions but believe that they should be done in parallel with the diversification of the economy. For example if they were to implement policy no.3 above, how would the CBN ensure that inflation does not cross a certain level if the economy is overly reliant on a single commodity or imports everything it consumes?
To the initial points you raised; (1) local and foreign goods may not be substitutable - The keyword here is "MAY". A feasibility study should make this conclusive which I want to believe was conducted prior to the restrictions.
(2) we may not actually have a comparative advantage in producing said items, raising costs for any businesses which require the items as inputs - Agree with this as we all know that our erratic power supply means a higher cost of production. However the government can put policies in place to drive costs down e.g. Tax relief
(3) import bans breed corruption, by giving politicians opportunities to hand out exemptions to allies, and encouraging smuggling to evade the bans. - The government has not banned these items. Therefore if importers can legitimately source the currency required for them to buy these goods then they are free to. This is my understanding of the restrictions.
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