Kudos to Soludo on The Naira’s Strategic Agenda

SAP was imposed on us by those, who seem to have rote-learned models and concepts, which often have no practical applications in real life, even in America and Europe, where Adam Smith, John Keynes, Paul Samuelson, Jeffrey Sachs and other old and new economic theorists sprouted. And where economic theories, frequently touted by Nigerian fiscal “experts” originated; theories, that are too quickly, too gladly swallowed by too many Nigerian slews of “modern” economists. I take the view that we must examine economic models, concepts and sundry theories with keenness of mind, with a view to deconstruct such, for local relevance and applications to immediate conditions or circumstances

Too often, it is as if, our “experts” are credentialed to be in hot-pursuits of some sorts of catch-up game, with ideas and propounded concepts of foreign experts, this, even when such foreign experts and their countries of origins, operate frequently outside these Business School Models or parameters, theories and concepts. Do Nigerians swallow old unworkable concepts, hooks, lines and sinker?

Must Nigerian experts dogmatically and robotically continue to pursue abstract, academic and textbook theories? Even when it does not suite our local conditions and circumstances? Must we pursue public policies that are clearly inimical and at variant with Nigeria‘s short-term and long-term national interests? Must Nigerians zombie-like, swallow theories because such theories sound good academically? Why must we follow models that do not benefit our nation?

Why must any Nigerian, and in particular, in this fiscally wounded and still hemorrhaging generation of Nigerians; Nigerians who still suffer mightily from SAP’s obnoxious and debilitating policies, ever want to listen to Idika Kalu or Olu Falae? And for that matter, why would anyone want to listen to the old guards, who had one or the other thing, or something and anything to do with our national policies flowing into, within and from SAP?

I am willing to concede that it is acceptable to ask certain specific questions of Governor Soludo on his policy initiative phase II, as he describes it. What beyond logistical concerns determined the gestation period of one year August 2007- August 2009? Could this long time span not afford vile plans on the parts of those who wish Nigeria ill?

Secondly, Why was it necessary for the CBN to recently promote the redesigned larger Naira notes? The same notes that will now be withdrawn? Was this streamlining always part of CBN’s phase II? Or was it an afterthought? What necessitated the switch? We are not privy to all the facts and indices, which the Central Bank of Nigeria has relied.

Additionally, there is a development, since the policy announcements, that makes me have some reservations. A ringing endorsement by the World Bank gives me leery feeling about all this. Can CBN policy be good for Nigeria? Should Nigerians be very suspicious and be wary, of a policy, when a policy is so liked, almost instantaneously by the World Bank? Weren’t the World Bank and the IMF the architects of SAP, the cause of our present and persisting fiscal wounds and fiscal nightmare? Are the Breton Woods institutions now reformed or “born-again”? Even still, I am unwilling to dismiss Governor Soludo’s reforms and innovations.

Nigerians worldwide must be aware that Professor Charles Chukwuma Soludo is an activist economist for good cause, our nationally worthy fiscal cause. And those who swear by market forces, demand and supply’s received immutable theorems, should be aware that Professor Ben S. Bernanke, chairman of the Federal Reserve Board of the United States, is an activist too. Bernanke has, as recent as last week, intervened in the financial market, with cut and slice in the lending rate, as well as pumping billions of dollars into the financial market, instead of waiting for manufacturing base or market forces of demand and supply to solve the credit crunch and liquidity crises which America currently faces as a result of the mortgage meltdown.

Only last week, America and European Central Bankers, injected hundreds of billions of dollars in the financial system to stem the downward spiral of the dollars and the American economy, in the wake of the sub-prime lending scandal with the attendant molten meltdown in American mortgage industry sub-sector.

The Europeans followed the Americans with its activist-like, interventionist-like actions, to spur and nurture demand and supply, or market forces to act in sync, or cajole demand and supply to follow the orders of, American and European written scripts of national interests. Professor Soludo is, in my view, pursuing Nigeria’s national interests, just as his counterparts in America and Europe have always done and just what they did again, only last week, with direct intervention in the financial markets. It was the infusion of subsidy-like $200 billion dollars.

In America and Europe, official actions negate notions of freewheeling, or cavalier and laissez faire market forces of supply and demands. American and European officials obviously see such concepts as separate from real life economics and global developmental competition. Past and recent actions by American and European central bankers are clearly indicative of where their priority lay, between theory and practical actions for their national interests.

Nigerians experts can do no less for Nigeria.

Written by
Paul I. Adujie
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2 comments
  • I agree intoto wth the first writer.Every policy propounded in Nigeria from Balewa to now is sound and credible.What went wrond has been implementation.Nothing has changed.The gurus are waiting for Soludo to launch his program before they conter it.It has always been like that.I just pray President Yaradua do something to STOP SOLUDO

  • Nice piece Mr. Paul, I'm neither a proponent nor opponent of SAP, and however I will strongly suggest that you hold off judging the SAP maestro until we see the outcome of Mr Soludo's effort. In my own view, Mr. Paul, it is not that we've had bad policies, it is the implementation that matters. We've always developed one policy or the other fashioned after the western world, it's rather unfortunate that we don't have the political seriousness to see such policies through. Before you go on congratulating Mr. Soludo you need to understand that an excellent policy if not followed with determination and sacrifice by our political elite, the result will always be the same. Although I do not see any reason why we should decimalize the naira, but at this junction I really don’t care, what I care about is doing something that will change the economy of our country, if decimalization will do it let it be, if selling off all public assets to private equities will do it, then let it be. Nigeria needs radical solution, even though based on my little economics Mr. Soludo’s effort seems like putting the cart before the horse, however, if that is what Nigeria needs then let’s give it a short, we’ve been disappointed before, but disappointment doesn’t mean we should maintain the status quo, let us try something new. And since Mr. Soludo’s effort is new to Nigeria then lets try it. Although, I know that countries like Argentina, Brazil etc have tried this same technique more than three times each, whether they are successful or not depends on whom you are comparing the countries to, but that doesn’t stop us from giving it a short.

    On a final note, I pray that this new effort will yield fruit, we need hope, we need a little bit of light at the end of the tunnel. The madness must stop, I hope this will start the turn-around we so much yearn for.