Do We Still Need Economists in Nigeria? -By Simbo Olorunfemi

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Simbo Olorunfemi

Simbo Olorunfemi

 

How will the devaluation of the Naira simply induce the production of local alternatives, when the conditions on the ground simply do not support such? How does a devalued Naira help? How will locally-produced goods become cheaper when the costs of the importation of machinery and other inputs would have gone up? How can you do anything meaningful at home with an interest rate of 20 percent?! Where is the incentive for banks to lend to the real sector when they only need to buy into treasury bills, bonds and round-trip forex? Which banks really? The same ones who now sell flight tickets, setting up shops to compete with their customers?

Robert Neuwirth submits that “Economics is a subject far too important to be left to the Economists.” Listening to two Nigerian economists on TV, recently, approbating and reprobating at once, I could not help but agree with Neuwirth. As a matter of fact, one of the reasons Nigeria is in such a mess is because the country, for many years, has been managed from the desk of some arm-chair economists, who have dissected her like you would do a cadaver. They have carried on, charting with candle and plotting on the basis of some technical jargon, in fundamental disregard for the fundamentals of this economy. They have been working with a template handed over to them by their masters, who are completely lost about the nature of the economy they teach their minions to manage. Is the problem with economists? Perhaps not. They have largely been schooled to believe a lie, sold onto a fallacy, many of them have built a life peddling these to suddenly make a volte face.

How do you convince them into believing that the so-called free market is only a lie? How do you make them accept that laissez faire is only “a fiction, an artificial construct created and held together with the connivance of government…a deliberate policy, conscious of its own ends, and not the spontaneous, automatic expression of facts?” They query the ‘propensity’ for imports? So they stop allocation of forex to the importation of some 40 items, including toothpicks. Why the resort to importation, they never seem to take time to find out? Who are the people who import these items? They never ask. Are these items actually imported in the quantity so declared or is this just a front for something else? Could it be that there is something more sinister going on somewhere, with money laundering and forex round-tripping, as likely culprits? How many genuine importers actually gain access into the official forex window? Is the bulk of trade and importation of products not being funded from the alternative market?

We do not need economists now. We need leaders with vision, bold enough to pursue this, with a healthy dose of common sense.

It is foolhardy seeking to tackle the challenges facing the Nigerian economy in disregard of the activities in the informal sector, running on its own fuel. That is the reason why the Jonathan government would have us believe that rice importation dropped significantly on account of positive strides in the agricultural sector. But that is because they choose to only look at the official figures from the Central Bank of Nigeria (CBN) and the ports of entry. Yet, the market is flooded with imported rice, helped in through unofficial and ‘official’ routes.

So the economists argue that the Naira ought to be devalued. They say that will curb our import dependency. They argue that would drive local production and boost the local economy. What of the hike in price that will induce? They say people will simply adjust and patronise locally-produced goods. Just like that?

These are part of the reasons why we cannot afford to leave the economy to the economists. How does a devalued Naira help the economy when the infrastructure is still at zero, electricity is at zero, petrol and diesel prices will rise, transportation costs will go up, and the price of all goods will shoot up, beyond what can be described. By the way, they want the ‘subsidy’ on petrol to be removed, at the same time.

How will the devaluation of the Naira simply induce the production of local alternatives, when the conditions on the ground simply do not support such? How does a devalued Naira help? How will locally-produced goods become cheaper when the costs of the importation of machinery and other inputs would have gone up? How can you do anything meaningful at home with an interest rate of 20 percent?! Where is the incentive for banks to lend to the real sector when they only need to buy into treasury bills, bonds and round-trip forex? Which banks really? The same ones who now sell flight tickets, setting up shops to compete with their customers?

The same panacea they came with in 1985. The same prescriptions they have administered in different forms and variants is all that they have. Okonjo-Iweala came with her own version; see the mess she has left behind. We need to be highly wary of economists. Any proposition that does not recognise that there is another economy beyond the one they are plotting graphs for is bound to fail.

We need to dismantle the very premise upon which the solution being hawked around by the economists strutting their stuff around the corridors of power rests. We do not need economists now. We need leaders with vision, bold enough to pursue this, with a healthy dose of common sense.

Simbo Olorunfemi works for a communications consultancy.

 

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