And They Call That Progress!
On a summer weekend afternoon in 2005, I needed the services of the Post Office at the Gatwick Airport in the UK. At the time, I was flying for a company that flew cargo out of Gatwick. My schedule for a while had been being away from the UK during the working week. My mission on that Sunday was a banking transaction through the Post office since I had missed out on banking business hours â€“ I was going to deposit a cheque. I drove to the airport and went to the terminal building looking for the Post Office, which I was sure would be opened on Sunday. Alas, I searched all over the terminals including the corner I had previously sighted one. My roving around must have aroused the attention of Security, because I was soon accosted by a gun toting police officer â€“ this was post 911 era. The officer asked courteously if I needed help. â€˜Yes, I'm looking for the Post Office ...I'm sure there used to be one around here,' I said looking lost.
The officer laughed almost hysterically and said, â€˜You're damned right sir. There used to be one - right at that corner,' he pointed to where I thought it would be, â€˜but it was closed down two weeks ago for downsizing. ...And they call that progress!' Now I needed it and it was no longer there. I told the story to a couple of friends. My friends these days are using the expression for almost anything we celebrate that belongs to the Stone Age in Nigeria. The other day as we sweated it out in traffic, a loaded keke NAPE P wobbled pass; a colleague in the car remarked, â€˜And they call that progress!' He was referring to the three-wheeled contraption laden with human beings. Our psyche has been dented by an economic system whose fundamentals are greatly flawed. The timing for this article may seem off as most elites are busy with the issue of who is or should be the president. We often forget that the man in the street is more concerned about the economics and where the next meal will come from, if at all that will come.
Recently, we are being bombarded with achievements for which we ought to bury our heads in the sand in shame with. Of interest, are the story of a metal tinker in Abuja who claimed to have graduated 5 people on how to fabricate ice making machines and stories of university graduates repairing old mobile phones. For little minds, these are great achievements. A friend remarked, â€˜And they call that progress! Is that LG or Samsung or Toshiba in this competitive world?' Those people should be commended nonetheless, but it is Herculean in the face of competition with imports which the exchange rate mechanism as it were is fuelling. Calls for a rethink of the exchange rate mechanism have fallen on deaf ears. There seems to be consensus amongst Nigerian economists (both left and right) about the auctioning system as an exchange rate mechanism. Their fear is the experience of the import licensing days and not much of the defence of market forces on the exchange rate mechanism, which in any case is distorted.
During last week's Parliamentary Congress in Beijing, Chinese Premier, Mr. Wen Jiabao, rejected criticism about China exchange rate mechanism. â€˜We don't take kindly to other people telling us to revalue our currency,' he said. China's currency, the Yuan, was tied to the U.S. dollar during the industrialisation years until 2005. It turned out to be the vehicle that propelled China to move from underdevelopment to the No. 3 position in world economy. In 2005, China's prosperity became apparent, and the West pleaded for the deregulation of the Yuan. The currency thus was allowed to rise in value by about 20%. However, when global economic crisis cut demand for Chinese products and factories began closing, the Yuan tie to the dollar was reinstated in late 2008 (BBC document 14/3/10). I'm not an economist, but which economics school did our celebrated economists pass through â€“ some of them with PhD. Some are even professors of economics. Or which master are they serving? Should there not be one economist of repute that could kick-start a rethink of our exchange rate mechanism? To conform is the hardest thing on earth according to our own late Tai Solarin, but at least a brave one should emerge.
Since September 26 1986, the Naira's tie to the U.S. dollar was broken and our factories have since been closing down; the army of those in the Diaspora has been swelling from that day; quality education has been spiralling down; health care delivery is now a shadow of what should be; infrastructures have been decaying, unemployment has been soaring to the heavens, with graduates roaming the streets, etc. Are all these coincidences? Stubbornly and ignorantly, we engage in self delusion and blame the lack of constant electricity for our underdevelopment as if the exchange rate mechanism could not be responsible for the lack of power; underperforming refineries; unemployment; reduced installed capacity utilisation, etc. For a start, a well managed exchange rate mechanism would have starved the funds to import generators to say the least, and the propensities for imported finished products that only create jobs in the countries we import from. Nigerians will tell you that if the power is fixed, that is it. I don't think so. Egbin has installed output of 1200megawatts, but has never delivered more that 700 megawatts. It cannot be sustained because of one reason or the other. If it is not militancy, it will be gas as if they cannot buy gas in the open market.
In a conversation recently on board a flight with a high-ranking government official, the gentleman made a remark that borders on carelessness. He said, â€˜I think Nigerian youths are not innovative enough.' I was so upset that I retorted, â€˜How innovative do you expect them to be â€“ to go and reinvent the space shuttle?' It is not that government should give direct employments to our youths, but government can lower the unemployment index through policies that favour jobs creation in the private sector. This idea of our youths being creative to self-employment is nonsense. Yes, a small percentage would do that and become ancillary to giant industries towards a greater goal for Nigeria, but the majority will have to be absorbed in organised labour in industries. Imagine everybody in Japan trying to make a vehicle or a TV, instead of the giants like Toyota or Sony, or every South Korean making a fridge or TV or phone instead of Samsung or LG. When I was in England, I lived in Southwest Sussex â€“ a county with a GDP that was higher than that of the whole of Nigeria put together. There, every door is not a shop; instead you have industrial areas, residential ares and shopping areas. In Nigeria every door is a shop and everybody is selling intangible things in order to survive. This is lack of organisation â€“ a culture that cannot be classified as civilised. In Nigeria we seem to be pulling in various directions and going nowhere because that is what the exchange rate mechanism supports.
This is a lone voice in the wilderness on this issue and every time I think about it and how unpopular it seems, I wonder if the rest of the society is thinking at all. Is it ignorance or apathy? All the thriving upcoming economies in the world, China, the whole of the Middle East, etc. have an exchange rate mechanism that ties their currencies to the U.S. dollar. Their non-oil exports have been growing in quadruples. We, with a tottering economy stubbornly float the naira in an auction to please the West, but our non-oil exports have been shrinking - a telltale come to think of it. Do we need rocket science to explain that our exchange rate mechanism as it stands will take us nowhere? Even those who think that this arrangement, as it were, favours them would be surprised how much more they would be worth should Nigeria's wealth multiply. My guts' feeling tells me that if we fix the exchange rate mechanism today away from auctioning, we are likely to overshoot our dreams and make the prestigious list of the first 10 biggest economies by the year 2020, simply because of the ingenuity of the Nigerian and the hard trodden journey he had threaded thus far. The only obstacle will be the inability of our so called economists to link the exchange rate mechanism to project 2020. That if they can overcome, I will call progress!
Samuel Akinyele Caulcrick
Zaria, Kaduna State.