EMEFILIAN MONETARY POLICY THROUGH NAIRA REDESIGN: A CALL FOR CELEBRATION OR CONCERN?

EMEFILIAN  MONETARY POLICY THROUGH NAIRA REDESIGN: A CALL FOR CELEBRATION OR CONCERN?

"Some things may be right, but still wrong"
- Anonymous

If there is any item the Nigerian people have scored the government of the day low, it is in the area of the economy, and arguably deserved to be so, since after security of lives and property, one easy way people feel the pulse of the government in power is in their purchasing power - how much of their disposable income is enough to meet their basic needs?

Since coming of age, I doubt if there is anytime the prices of goods have skyrocketed like we have in the last seven years. There has been a over 100 percent in the prices of consumer goods and luxury goods. For instance, when this government came on board, the price of a family size bread was between #150 to #200, today, same loaves of bread is being sold for #1000 to #1200. What a stagflation!

Similarly, a bag of rice which used to be #18000 as at 2015, if my memory is served me right is now being sold for as much as #40,000. This is more than 200 percent increase in prices. A Toyota Corolla as at 2015 was between #1.2m to 1.5m, today, if you don't have up to #3m and above, don't bother to move closer to a dealer shop. Another economy indicator which Nigerians are quick to judge any government (but of which I'm very reluctant to disposed about) is ratio of naira to dollar. When this government took over, it was #180 to $1. Today, it is now #800 plus to a dollar. Except for the fact that we are import dependent, dollar value to naira should be the least of our concern.

Sincerely, from all indications, we've retrogressed economically. While all these problems can not be entirely placed on the doorsteps of the government of the day, the truth however, the majority of the problems can be laid at its feet for at least two reasons. First, there are so many policy missteps undertaken by this government. The second is every government is elected to solve problems, so no excuse for failure.

Granted, the world over is experiencing economic depression like that of 1930s all thanks to COVID-19 outbreak and needless Ukraine/ Russia war, yet, there are so many things this government could have done to save the day and ameliorate the plight of the common man. For instance, one would have expected that this government would have tapped into the country natural resources (as the easiest way) to boost the country revenue profile, rather than excessive reliance on loans. Unfortunately, this government has chosen the easiest way to raise money which is borrowing to reduce the country infrastructural deficits.

If a country economy is in shambles, three people should be held responsible majorly. The first is the President.  The second is the Governor of Central Bank. The third is the Minister of Finance. These people constitute the country first level of economic managers. Their actions and inactions, body language and winks go a long way to determine what happened in the country national Economy. The Nigeria Central Bank Governor has enormous power and enjoined immunity similar to that of the Governor of States' which placed him ahead of the Minister of Finance.

So it was not surprising when the Mr Godwin Emefiele came out some days ago that the naira is being redesign for two primary reasons: one to mop excess fund from the circulation which is over a trillion naira, to fight against kidnappers, and also help to fight corruption. On a face value, these are  novel ideas and objectives, but the question is how thoroughly was the policy looked into? What are the modalities put in place to guide against the people who will like to circumvent the proposed policy? Is the timing for such policy right or wrong? Does the CBN acting through the Central Bank Governor have the right or power to embark on such policy having consulted or sort the President approval? Is this policy being put in place by the government of the day to prevent the presidential candidate of the APC from winning the election?

Beginning with the first question, if there is anything that any policy maker must bear in mind is that there are intended and unintended policy outcomes, and as such, policy makers must do all they can to anticipate such, by throwing  up different scenarios before embarking on such policy? I'm sorry, I've not seen this CBN Governor as a deep thinker like his immediate two predecessors. Sincerely, I may be wrong, but I believe Nigerians deserve better than the  present CBN Governor.

For instance, it is surprising that a policy that will have far-reaching effects like naira redesign didn't get the input of the Minister of Finance who is a co-manager of the economy and chief economic adviser of the President. Yes, the CBN Governor doesn't need to consult the Minister legally to embark on such policy, but morally, he is obliged to do so if the two are working for the same purpose: the promotion of maximum happiness for the greatest numbers of Nigerians, and not the other way round. What this one connotes is that there is no harmonious working relationship between the various ministries and agencies of government in this regime. Suffice to say, everyone is a gang master, and Nigerians people are the sufferers.

The rightness or otherwise of a policy is a legal and moral question. Legally speaking, the CBN is obliged to redesign the country currencies every three years or so to guide against counterfeiting and protect the country treasury. Thus legally, the CBN led by Emefiele is right. Morally however, it may not be so. The policy seemed to be ill-timed and more of settling political scores than a policy design to solve the country hyperinflation. The CBN Governor should have know that we currently experiencing economic crunch- no money, thus engaging in adventure that may make the country poorer should not be embarked upon, no matter how seemly good it may seem. Secondly, this government is winding up, and should not be seen to be creating problem for an incoming government. Such proposal should be prepared for the incoming government to my mind.

There is no doubt that CBN followed due process in the policy making by consulting the president and getting his approval, but is the President approval sufficient enough morally and in terms of policy implications? I doubt! To my mind, the country economic team (if any) should have been consulted but this was not the case.

On whether it is meant to prevent the APC presidential candidate from winning, whatever I conclude here is just a conjecture, but one which may turn out to be true. First, it is on record that the President if he had had his way would have preferred someone's else's to be the party flag bearer other than the Asiwaju Bola Ahmed Tinubu, same way, with the cabals. Since after the primary, some decisions of the government of the day seem to be pitting the party against the Nigeria people who have the power of life and death in who becomes the president of the country comes May 29 through the ballots. Some of these decisions include the lackadaisical way the ASSUU issues were handled, the return of fuel scarcity, among others.

With this policy now, the naira ratio to a dollar has risen astronomically. It's now #835 to a dollar as more people are rushing to the black market to mop dollar exchange  for their illegal wealth. How the CBN controlled this fallout is what one must look out for in the coming days.

In a sane society, there is no reason why the Central Bank Governor should continue to stay in office after he collected the APC nomination form using fronts. There is no reason besides his previous abysmal and ignoble past performance in office.

As a Nigerian, I just hope this naira redesign doesn't move us from frypan to fire. If the policy succeed, it will be a call for celebration, if it failed, it is  a call for concerned, and it may end either way.

God bless Nigeria!