Foreign exchange dependency should be viewed and treated as alien to these proposed indigenous monetary reforms, as long as a home grown domesticated financial policy is radically pursued and rapidly established within the economy. Such a policy will need to focus real hard, with deep concentration, by putting in more efforts on locally processed, improved and value added operations in almost all agricultural produce, raw materials and minerals that are naturally sourced from Nigerian soils. This is the best time that a radical move or unique approach on a home grown financial policy could be effectively implemented, directly anchored on a backward integration economic policy that enhances strong external reserves build-up for the economy. This should be, if the federal government is really sincere in seeing this economy back on track (after several decades of experiencing economic quagmire, national developmental stagnation and national financial reproach in the economy, including recent recessions and a short implementation of austerity measures in the 1980s).
This also creates the need for everyone to cast their mind down memory lane, in a historical overview, to the time when the nation’s economy was very strong driven by a high productivity profile and its subsequent strong exchange rates of the local currency (pounds/naira), in the early 1960s and into the early part of the 1970s. The nation’s economic outlook during the first and second republics was very impressive as the nation was always posting surpluses in her annual trade balance sheets. This was actually based on the high national economic efficiency (high productivity/very strong GDP) recorded from export operations, as against lower volumes of expenditures on imported goods (in cumulative monetary worth) into the country. In today’s Nigerian economy, the complete reverse is the case, with heavy stress being laid daily on the ailing, poor and very weak local currency that continues to impact on its declining foreign reserves.
This independent home grown and innovative policy proposition is technically supported by evidences, especially with the very good example from the exploits of Chinese’ Deng Xiaoping (born: 1904; died: 1997); recognised as a statesman, political theorist, and revolutionary that served with reforms that led to the transformation of China for economic development since 1978. Xiaoping’s China did not actually have any blueprint for the spectacular economic development made by China. It was simply a strong focus on the economic principle of comparative advantage that did the Chinese economic prosperity’s magic, and launched China into the international market space, and purely actualised on Xiaoping’s reformist economic plan. Therefore, nothing stops Nigeria from achieving a similar economic feat (with her favourably disposed potentials); especially now that this highly commendable policy of naira-for-crude has come to be for local refineries. Experts in the country — such as the Wale Eduns, the Bismarck Rewanes, the Chijioke Nwaozuzus, and the likes of Johnson Chukwu of Cowry Asset — with serious focus on the nation’s economic outlook should think in this direction, and solve the complex financial situation of the economy.
Therefore, as the federal government has officially made this oil industry initiative a permanent policy, this commendable initiative should be taken further with strong political will, and allow this economy to go extra length with a full import substitution economic policy. This should be by extending it over every available locally sourced natural resource, demonstrated in a value addition initiative that improves the monetary worth of the export goods that are demanded by our trading partners in the global market. This is viewed as a strategy that cuts across all economic subsectors (agricultural and solid minerals resources).
Local players should be encouraged by the government to improve their capacity and enhance their business operations. For instance, the Dangote Refinery with her daily refining capacity of 650,000 bpd of crude oil, on the naira for crude initiative, is like the biblical analogy, “the rod in our hands”, the God and Moses encounter, in which Moses was encouraged to lead his people out of slavery in Egypt, into the promised land; to do exploits and deal with this economic situation that continues to drag more Nigerians into deeper poverty. This suggested innovative strategy to shift from foreign exchange dependency should be viewed as a way out of financial strangulation of an excessively high exchange rate against the naira, to national economic stardom.
Do we truly know or appreciate what it means that all daily domestic consumption of refined products is 100 percent self-sufficiently provided from within the economy, without an iota of foreign exchange dealing, from start to finish? It’s a liberator from mass poverty in Nigeria.
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