Nigeria is passing through a difficult period. The challenges are in many fronts and require the collaboration of all stakeholders to address for the sake of Nigerians.
So the visit last week, of the top managers of the Nigerian economy, to the National Assembly was in that direction.
The team was received at the House of Representatives on Tuesday (06/02/24) and then at the Senate on Friday (09/02/24).
The visit of the Economic Management Team to the Senate was in response to a special summon by the Senate Committee on Banking, Insurance and other Financial Institutions. The Team was led by the Minister of Finance and the Coordinating Minister of the Economy, Olawale Edun. The members in attendance were the Minister of Budget and National Planning, Abubakar Atiku Bagudu, and Governor of Central Bank of Nigeria, Olayemi Cardoso.
The presence of the Minister of Agriculture and Food Security, Abubakar Kyari gave a clue that the focus of the interaction was the hardship and hunger in the land.
The Team met with a special panel comprising relevant Senate Standing committees. Senator Yahaya Abubakar Abdullahi, Chairman Senate Committee on National Planning and Economic Affairs moderated the meeting which has in attendance his colleagues from the Committee on Finance as well as the committee on Banking, Insurance and other Financial Institutions.
In his opening remarks, Senator Abdullahi, representing Kebbi North Senatorial District, stated why the meeting was convened.
“We know why we are here. We are facing one of the worst economic crises of our time. I am 74 years old. I have never seen something like this. It is our responsibility, as leaders and statesmen, to work out solutions and for people to see that those solutions we are trying to work out will work.
There is no grandstanding. There is no space for argumentation or exchanging brickbats. We have the responsibility to Nigerian people to deliver on the most important challenges of our time.”
Abdullahi said the current economic challenges in the country requires innovative, creative thinking and coordinated action, stressing that “there is no time for us to waste. We should not think of going back on the same old paradigm.
This economy, from my own understanding, requires a fundamental paradigm shift, away from our usual habits of selling oil and buying everything under the sun.
That kind of paradigm, to me, is gone. We in the National Assembly are united and we are with the executive arm of government in every kind of effort that will be required to solve this problem and advance the fortune of this nation.”
Next to speak was the Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Mikhail Adetokunbo Abiru. He spoke to the key issues of rising inflation, volatility in exchange rate, Ways and Means, access to credit, invalid infractions, need for proper coordination between the monetary and fiscal authorities and the issue of compliance by the CBN.
Senator Abiru too did not mince words when he said the country is facing serious economic issues which are a carry over from the past dispensations.
Although Abiru admitted that Nigeria indeed had “serious economic issues,” he wanted people to acknowledge that most of what constitute the current challenges are not the making of the present administration.
“They are largely macro-economic policy decisions that have been taken before the advent of this current administration and it is also important to mention that the bold initiatives of this current administration, whether in terms of fuel subsidy removal or the convergence of the exchange rates, and even the ongoing tax reforms, they are all, in my view, attempts to correct most of the distortions that had been created by the past administrations that we have had. So for me, they are policies in the right direction.”
Abiru who is representing Lagos East Senatorial District, said it is inevitable that the policy decisions so far taken by the current administration would come with some pains. He then took on the CBN Governor in particular on the measures being put in place to address the situation.
With the Inflation climbing to almost 29 percent, Abiru asked to know the specific responses by the CBN and how soon Nigerians could expect a moderation in the inflation. He also sought to know the measures being put in place to boost food supply to reduce food inflation and to support the productive sectors of the economy, notably agriculture and manufacturing, being the two critical sectors currently experiencing a tepid growth rate.
Abiru also touched the reported sharp practices in forex transactions. He told the CBN Governor: “The invalid transactions, as we are trying to be transparent, I also think we must help the credibility of the country so that those who are involved in those invalid transactions, we should know them.
There should be consequences so that it will stand as deterrence. We would like you to give us assurance that you will avail this committee the decisions that are being taken to deal with it… So we must know those involved, whether they are banks or they are customers. There should be consequences otherwise, Nigerians, as we know ourselves, clearly we will go back to that kind of thing.
“On the issue of foreign exchange as well, to the extent that we have been able to validate the inherited forward, I also think, to the extent that we were able to discover that some of them were invalid, perhaps again, we should conduct a forensic audit on the past transactions as well. So that let’s clean our books. Let’s gradually begin to clean the system. I think it’s very important for the credibility of the country and credibility of all of us.”
The Chairman, Senate Committee on Finance, Senator Mohammed Sani Musa, faulted the latest statistics released on inflation. He said the 28.9 percent which was officially declared at the end of December couldn’t have been correct when about 70 percent of the Nigerian populace couldn’t afford three square meals. “What are we doing about that? It is our responsibility to find a way out of it. Unemployment is high.
Almost about 37 percent. So when you are talking of hunger, that is poverty. And that is what we call insecurity and we can see what is happening today. It is because of those little things that appear to be danger ahead that today we converge here, trying to find solutions.”
Senator Sani Musa, representing Niger East Senatorial District, also challenged CBN policy measures on foreign exchange: “I have heard you (CBN Governor) on Arise TV about your policies. Will you convincingly tell Nigerians that your policy is working? Yes. I know it’s a free market. Supply and demand will now be able to dictate what your pricing should be. Will you be right to say today that the exchange rate that we are paying is commensurate to the demand? If it is, in what sector? The most important sector is agriculture. When people are hungry, that means it’s not working.
“I take one single example with Toyota vehicle. Go and look at the number of Toyota vehicles in this country. Do we manufacture Toyota vehicle? How much of foreign exchange do we pay for Toyota vehicles? Do we have a policy that will make backward integration to work by making Toyota come back here and establish Assembly Plant that will serve Nigeria and West Africa sub-region? Look at our population. When you are talking about agriculture, have we seen what Brazil is doing in agriculture? Will Central Bank be able to tell me what Brazil Development Bank is doing, Central Bank has done it in Nigeria? We must tell ourselves the truth. These policies are not working.
“For some time, the Central Bank closed the OMO market (Open Market Operation) to allow the market to dictate itself. And I’m asking, has that worked? There is no country that will allow such freelance in it’s foreign exchange policy. When last have you heard either in UK, Saudi Arabia, even in some of the developing countries, where you allow your foreign exchange to skyrocket? It’s not done. It’s only a country like Zimbabwe that would allow that. But we are in a country with talented people. We have some of the best economists in this country.
The CBN Governor, you are a banker, if your bank is not working, assuming you are a Managing Director of a commercial bank, the basis of you having that bank is to make sure that you provide services and be able to make profit for your investors. Which investor today in Nigeria or a foreign investor will feel very secured to bring his investment to this country? From the inception of this administration today, how many Foreign Direct Investment have we? How many have divested? So when we come here today, I think it is high time that we buckled our belt to do the right thing.”
Former Governor of Abia State and Senator representing Abia North, Orji Uzor Kalu, in his interventions, also heavily criticised what he called “dollarisation” of the Nigerian economy. He called on the economy team to abolish a situation in which in some shopping centres in the country, dollar is on demand as medium of transactions instead of the local currency, Naira.
Responding, Olayemi Cardoso defended the CBN positions on some of the issues raised and was confident that the measures put in place were not only working but had started yielding results.
“The shift to a market driven exchange rate was intended to create a stable macro-economic environment and discourage currency hoarding which creates a distortion in supply.
“To address exchange rate volatility, a comprehensive strategy has been initiated to enhance liquidity in the foreign exchange market. We have already started to see a shift in a positive direction. It has indeed started yielding early results with significant interest from foreign portfolio investors which was a concern, that has already begun to supply the much needed foreign exchange to the economy.
“For example, the past few days, we have heard over one billion dollars that have come into the market and this quite frankly is the answer to the question as to how we know that the policies are working.
“The market has been responding to the policies that we have put in place. Our measures aimed at improving US dollar supply into the Nigerian economy has significant potential in taming the volatility of the exchange rate and in turn moderating inflation. However for this measures to be sustainable, we must as a country moderate our demand for foreign exchange.”
Beyond the rhetorics and all the economic jargons, what Nigerians yearn for is an improved economy that will translate into better condition of living with abundant and affordable food in their homes.