It appears President Muhammadu Buhari has swung into action to save the economy by taking charge and inaugurating a new economic advisory council. They will serve as new managers of the economy through their experience in economics, finance and management and will daily advise the President on the best ways to run and manage the economy that had been badly run under the Vice President’s leadership.
However, it will be of importance to note the school of thought the President belongs to which is the system that favours the ordinary people of Nigeria. This is the system that favours a strong currency and robust economy where things are reasonably priced and affordable to the people of Nigeria. Buhari favours a strong naira as opposed to what operates now which is the huge devaluation of the naira. A strong currency leads to cheaper food prices, cheaper goods and services in Nigeria including house rents etc.
That has always been Buhari’s dream and the legacy he has always wanted for Nigeria and what he wants to be remembered for. But can this dream be achieved with the mix of strange bedfellows in the new economic advisory council? I am actually going to mention the two popular economic gurus, Professor Chukwuma Soludo and Mr Bismark Rewane. These two men belong to different schools of thought, which is why I called them strange bedfellows. Soludo belongs to the economic school of thought that favours a strong currency for Nigeria which is also the school of thought for President Buhari and the late legendary economist, Professor Sam Aluko. Rewane has always favoured a devaluation and further devaluation of the currency, an IMF and World Bank policy which has almost grounded the Nigerian state which triggers strikes, inflation and continued demands for salary review. This system works in production-driven economies like China, Japan, Taiwan etc where goods like electronics, spare parts, manufacturing and what you might term knowledge-based economies, where raw materials are developed into finished goods. These countries can devalue their currencies because of the huge export of finished manufactured goods and they can allow their currencies to float to correct temporary inflationary pressures in their countries. Nigeria is still among the many African nations trying to get out of the raw materials economy, yet, she has not been able to, till this moment, developed her raw materials. Nigeria remains a market economy, and the policy Rewane supports. This school of thought does not work for Nigeria or the African continent for now. This is where I see a clash of ideas where the President has to decide what he really wants for Nigeria.
Mr President has to look at this carefully so that the new economic advisory team will be able to work smoothly without the clash of two worlds or where the train is moving in different directions which would lead to nowhere. The stronger naira will stem the huge migration problems so as to also trigger the reverse in the huge artificial economic system of management where the goods and services are left to market forces. Many economists and experts along with the ruling class travel to the G7 Western countries but many fail to take note of this essential policy. In these countries, food and essential commodities are under regulation, meaning the governments continue to regulate this sector. If you go into 10 supermarkets irrespective of neighbourhood, price difference is not more than five or 10 cents on items like food and essentials like toiletries etc but here in Nigeria, when you use the same conversion, the differences go as high as 60 cents to a dollar. Shop A may sell an item for N400 while Shop B sells the same item for N600. This shows that when you leave essential commodities to market forces, it can cause inflation and economic hardship making the cost of living unbearable.
What the President has done is commendable but he should rejig the composition of the economic advisory council for smooth management of economic policy direction.
‘Bayo Adeolu,
[Punch]
