Fallacy of The Largest Economy



|  By Ebongabasi Ekpe-Juda  |

ONE of the “achievement” so-called of the Jonathan’s administration is the rebasing of the GDP of the Nigerian economy, to make it the “largest” economy in Africa. Though in practical terms, this does not translate into better life for the citizens, which is what is primarily and normally expected from governments. And since it did not so translate into better life for the citizen, it is seen as non tangible perhaps invisible achievement. There is an ample reason for such feeling in the land. When one looks at the preponderance of resources in the land, which others see as a geological scandal, and the level of deprivation arising from corrupt practices, one could not give any lesser verdict on that government and on the party that produced the government.

How do you pride yourself and thump your chest that you run the biggest economy in Africa, when ordinary Nigerians are currently living in darkness with the scorching heat in the day and night, despite the scandalously huge amount invested in the power generation sector in the last sixteen year of PDP government, with no appreciable result. What makes the economy the largest when most factories are closed and the few producing are doing so below installed capacity, due largely to inefficient power supply and high cost of generating your power?

How can you be happy to say that Nigeria is the largest and biggest economy when your currency is the weakest currency in African continent? Let’s look at the strength of the currencies in a few African countries and see why our claim is not only ridiculous, spurious but ironical.

NIGERIA Naira 1USD 199.00
EGYPT Pound 1USD 7.63
KENYA Shilling 1USD 95.05
GHANA Cedi 1USD 3.85
Source: Global Business

A causal look at this figure for a few of African nations actually indicates that Nigeria according to economies of Jonathan’s outgoing government is indeed largest economy in Africa but only in the negative. That a country could pack so much of its currency to purchase just one American dollar and still survives is really “great” and from this figure is indeed the LARGEST economy though in the negative, as it has the worst exchange rate in history. One indices of a strong and large economy is in the strength of its currency. What makes the Nigerian economy large when your currency is worthless? It is said that hyperinflation is a period of rapid inflation that tears a county’s currency virtually worthless, which is what we are having currently in Nigeria. What makes an economy large when there are no jobs, infrastructure decaying, inflation on a run-away stripe and almighty corruption at its highest level ever, where public officers have become self-serving and consequently the wealthiest in the world?

How can a country claim to be largest when honest business have relocated from your shores to other countries that offer better and more reliable and efficient infrastructure? Where goods considered as inferior in the Western world, are your best. This explains why a Nigerian will want to buy a motor part for instance, the serviceman will advice that he buys a fairly used one than a new one, because the fairly used will last better than the so called new one. Yet we have a government agency for standards, whose responsibility is to ensure that only standard products find its way into the country. A country that claims to be the largest economy, your citizen’s buy used cloths, used shoes, used plates etc, because that produced locally or imported are inferior quality.

Coming to the “valueless” currency, the explanation offered for the fall in value of our currency is as lame as those who offer them. According to them, Nigeria is an “import dependent economy”. Is it true to say Nigeria is not exporting at all? Is our crude oil not a commodity and even our gas? Which economy in this world does not import? From the list of these five African countries above, which of them is not import dependent? Which of them earns more revenue from export than Nigeria? I have been to a few of these countries and I know that except for power, all these countries depend on foreign goods. The only aspect that they do better than us is in the amount generated from Tourism and that cannot be compared to what we generate make from export in oil and gas sector. And for that to happen, they have better airports than Nigeria. We have the potential to attract more than they do, but for corruption. They have been able to manage the little that comes to them better than we have managed the huge resources that accrue to us from our natural resources. Look at what has been sunk into Airport remodeling and see what comes out of the project with tiles piling so soon. The amount spent like in all sectors of the economy is diametrically opposite quality and quantity of job done. With this huge expenditure, none of our airports is ranked among one of the best in Africa! Is that not a shame? Yet we pride ourselves as the giant of Africa and now the “largest economy” in Africa. Indeed!

I think if the incoming president wants to know what corruption means or how to spell it, let him beam the searchlight also into the aviation sector. I have an idea of a tip of the iceberg, but though a tip, it is mind boggling. Can we still remember that we were to build a second runway in Abuja and the cost was more than can build an airport anywhere in the world? Might be the President-Elect needs to know that there is an international airport project in Yenegwa, that so much has been spent, I meaning amount running into billions of dollars, with no site yet! Ironically one of the culprits in the aviation sector monumental fraud, am told is a friend of President-Elect’s friend. We are watching to see what he will do to him particularly with the aviation intervention fund fraud that he defrauded the government, and used the thirty two billion he collect from the intervention fund to established a bank in Ghana and Sao Tome and allowed the pseudo national carrier to die. This will be a test case for the integrity of the president-elect. Will he do what Murital did when he said he was fighting corruption and requested any Nigerian that had evidence of corrupt enrichment against anybody to go to court and swear to an affidavit? When it was done and his bosom friend Godwin Dabo was affected he said it should be stopped. We are watching Mr. President–Elect.

A country’s level of import, if corruption is taken out of it, depends on the population and the industrial activities. It is when what is generated as national revenue or earnings is far outweighed by import bills, that there is a problem. America imports, just like any other country. In the case of America in particular, with their factories closed and relocated to the Far East, even jobs are even exported, they now imports heavily. So even America is import dependent, yet their currency is not mere toilet paper as ours. It is as they buy more of imported goods (particularly the cheap goods from China and indeed the Far East, which of course is of a higher quality than what we import from there), that more jobs are exported thereby, causing their unemployment crisis. Same thing with Nigeria, the more we import the more jobs we create in those manufacturing countries. Home factories are closed because China’s factories are expanding due to cheap labour, and their currency gets stronger. We have no justifiable reason whatsoever to kill our currency. The unspoken reason for the fall of the currency is derivable from the officially acceptable criminal abnormality by the outgoing Jonathan’s administration, to wit, that over four hundred barrels of crude oil is stolen daily from Nigeria. The proceeds from the illicit activity being illegal money cannot normally be channeled through routine banking channel, but through things like illicit drugs, terrorism sponsorship, narcotic and the currency black market. Therefore, the lower the value of our currency, the more returns they make from currency black market. This explains why these businesses are thriving despite government effort at checking them. The incoming government should note that for thousands of years, every government that has used fraud- by adding lead into coins or using the printing press to solve its financial problems has destroyed the very economy it promised to save.

Strength of currencies in some African countries to the Dollar (less is better)
Strength of currencies in some African countries to the Dollar (less is better)

To underscore this fact, let me state what Amschel Mayer Rothschild said in the face of severe criticism that trailed the signing of the bill creating the Federal Reserve Bank of the United States in 1913 by President Woodrow Wilson. Rothschild said, “Give me control of a nation’s money (currency), and I don’t care who makes the law”. This was in the face of an intriguing question that was asked “Did the President sign willingly or was he coerced by the powers somewhere so organised” as to allow the creation of the FRB of United States. People, who control a nation’s currency, control everybody and everything in the country, including who wins election. Robert Kiyosaki noted that it was when the Roman Empire began destroying their own money (currency), fighting wars in faraway lands, and raising taxes on its workers, that it began to crumble. This is was the power somewhere so organised is dishing out to Nigeria one after another.

In our own case, these power somewhere so organised started by telling us that the naira was overvalued and that it was not good for the economy, as it encourages import dependency. But the simple truth is that, it was overvalued because the returns from their illicit activities were not so handsome. So they chorused devalued the currency to make Nigeria begin to export. They then came up policies purportedly to encourage export, while in actual fact killing the initiative with excessive multi tax system, but we now know better. The power somewhere so organised now says Nigeria is an importing country, hence our weak currency. But they told us a while ago, that with the devaluation we were not going to be import dependent but an exporting nation.

At the time our currency was strong, we had foreigners as doctors and lecturers in our universities. Today not even our African brothers can come here to lecture unless they are paid in dollars. As an undergraduate I had lectures from United Kingdom, USA, France, India, Jamaica, Guyana; I mean just name it, as well as foreign students, and our certificate was highly valued and respected globally as it should be. As a result of the devaluation of our currency, our educational standard also took a bashing. Now to do a master’s degree programme outside, Nigerian first degree holders are required to write qualifying examination, and that is one result of the devaluation of our currency. The government was sold a bubby trap by the power somewhere so organised, that if we devalue we will make more money by way of taxes. Yes it is true, but what value are we getting with the quantum from taxes? What gains are we making with contracts now denominated and benchmarked in dollars? So whatever gains we were made to believe we will make in figure, we lost it in one swoop by exchange rate differentials. Are we not spending more for less now? This is one reason the government could not maintain an airline, because the replacement cost was more than the gains from taxes and revenue was dwindling. Therefore, it became a case of pounds foolish, penny wise. More like cutting your nose to spite your face. So who gains? Simple, the power somewhere so organised.

Today if you visit the university bookshop, you only see poorly written, poorly produce local books. No international content. In the library, journals are nonexistent. I recall that as a master’s degree student in University of Ibadan in 1985, the most recent journal I had in Medical Sociology was two years old. Yet I was expected to be master’s degree holder like a student from Cambridge or Harvard. I hope that e-library will come to our rescues; but certainly not Akpabio’s type of e-library! It’s sham. A head of department in one of the universities told me a sad story of how lecturers write scholarly article and send them for publication in international journals and it will be returned as obsolete, with comments like, “We passed this point over two years ago”. The reason is traceable to the devaluation of our currency. So who is gaining by much talked about overvaluation of the currency that led to the devaluation? The universities cannot subscribe to international journals as a result of the devalued naira, as they require quantum of naira to subscribe, which they don’t have. Yet we produce post graduate degree holders. So devaluation has affected things we never could imagine or contemplated. And no government has the temerity to stop it. When Soludo attempted to do reserve engineering, the powers somewhere so organised short it down. So who losses? Nigeria. These powers somewhere so organized are not only locals, many of them are foreign interest, which through their protégé are very load. They prescribe to you what they cannot apply in their country. Therefore it is unfortunate, if you are motivated externally rather than inspire internally, as such motivation becomes manipulation, which is simply witchcraft.

 Could it be that the “power somewhere so organised” are behind the daily stealing of over Four Hundred Thousand barrels of crude oil from Nigeria as acknowledged by the Jonathan’s administration? Very likely, as they are making us engage in wars, thereby dissipating our engage and resources. Four Hundred Thousand barrels is not carried in jerry cans; bearing in mind that one barrel is equal to forty two US gallons, while four litres gives one US gallon. Therefore, one hundred and sixty eighty litres gives one barrel, so for four hundred thousand barrels of crude oil, we are taking about Sixty Seven Million, Two Hundred Thousand litres stolen every day. This is more than the combined output of Ghana, Gabon and Angola. How can this volume of crude oil be stolen every day, and the prying eyes of the Nigerian Navy, the Marine Police and other security agencies don’t see the thieves? Yet the government awarded contracts to ex-militants, and some rascals to guide the waterways. Are they guiding the nefarious activity of their paymasters or are they guarding the waterways. Can I or just anybody go and steal crude oil of the magnitude with these security agents watching? Questions, questions, questions unanswered questions. Little wander I hear that naval officers lobby and do all sorts to get posted there, and to be appointed as the Commander of the JTF, you must be very closed to the presidency and that within the shortest possible time you are a multi millionaire.

Mr. President-Elect, you have a herculean task, which I don’t envy you. But you will succeed because the masses are behind you particularly if you do not begin to compromise with the powers somewhere so organised. There must be a clean break from the past. All you need is to surround yourself with smart, trustworthy, hardworking people and you listen to their counsel, evaluate their counsels and implement the superior counsels. Note that those who fail to learn from history are doomed to repeat it!

Ebongabasi Ekpe-Juda is a Medical Sociologist, Security Consultant, a social commentator and the author of the books – The Bewitched Church; and- Issues in Security Awareness.

[email protected]

— Jun 1, 2015 @ 01:00 GMT


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