Should Nigerians fasten their seatbelts in 2017?

History shows that liberal democracies allow quieter politicking and public debates in order to maintain pressure for change as demonstrated in many countries. If there is low participation in political activities by the citizenry, it’s simply due to disappointment from politics and politicians. But for those who are willing to be part of a cause they feel strongly about, they commit time, energy and funds to it. During peaceful protests, it is the responsibility of the police to protect protesters, not to harass them. Last week Nigerians were on the streets again seeking good governance. The protest was aimed at bringing about change in the political, social, environmental, educational, health, including other spheres of public concern. Again, political activism was in action.

Political activism resulting in regime change as reflected in revolutions in Europe several centuries ago may or may not be normal, depending on the observer. The world witnessed peaceful demonstrations bringing down regimes in the former Czechoslovakia, East Germany and Poland in 1989. We have equally observed protests ending in tragedy, for example, in China when army tanks rolled over student camp in Tiananmen Square. Women’s protest against the inauguration of President Donald Trump was the largest, and most peaceful protest in US history. Politicians are however, uncomfortable when citizens have made up their minds to protest.

The political activism we witnessed in Nigeria a couple of days ago, was to pressure the federal government of Nigeria to change some of its fiscal and monetary policies that are responsible for economic hardship. Nigerians are frustrated, and consequently, they have taken to streets nationwide. The Nigeria Labour Congress (NLC), and the Trade Union Congress (TUC)were involved in the protests, and canvassed for stiffer penalties against corrupt political, and public office holders.
Bearing in mind the state of the nation, most Nigerians feel the federal government has not hearkened to their demands for good governance. Nigeria has been in economic recession since the last quarter of 2015. The economic recession has turned to stagflation in which there is persistent high inflation combined with high unemployment and stagnant demand in the economy. There are those who strongly feel they are excluded and marginalized from the dividends of democracy, while others feel that the country’s infrastructure is decaying at a fast rate.

Early in the New Year 2017, I didn’t know that Nigerians were going to protest, because predictions by some of our economists reveal that a better year awaits Nigerians. This is due to increase in price of crude oil in the international market. Specifically, their arguments were hinged on the premise that “should oil price hold above US$ 55/barrel, and oil production doesn’t fall below 2 million barrels/day in 2017,” then Nigeria will start coming out of economic recession. It was further projected that Nigerians would be happy if the country has “positive GDP growth rate of between 1.5 and 2.0 percent, US$ 432 billion GDP size, export earnings rising to US$ 46.2 billion from US$ 34.7 billion in 2016.”

As I write, the price of crude oil in the international market has risen beyond US$ 55/barrel, while the CBN has allegedly declared that the nation’s foreign reserve is at US$ 28 billion in January 2017. The production of 2.0 million barrels/day is yet to be achieved because the Niger Delta Avengers have not hearkened to the voice of wisdom from the federal government and other Nigerians not to destroy oil pipelines in the Niger Delta. The important question is this- will an increase in Nigeria’s foreign reserve, and rise in the crude oil price, reduce inflation and increase the value of the Naira?

One of my friends wanted to know the nexus among increase in foreign reserve, inflation and the Naira exchange rate. Before responding, he suggested that with increase in foreign reserve, the value of the Naira should be stronger. I was quick to let him know that a weak Naira is not because of a depleting foreign reserve but due to excess Naira in the economy. As the CBN is mopping up excess liquidity, it is equally ensuring that there is monthly substitution of Naira allocations for the US Dollar revenue received. I reminded him that when the foreign reserve was high up because oil price was equally increasing in the international market, the Naira was not stronger. I made him to realize that the value of the Naira will not improve because the nation’s industrial landscape does not encourage production. Most Nigerian manufacturers still need foreign exchange to import raw materials. The weaker Naira will not reduce inflation, neither will it decrease the dollarization of the economy.

When Nigerians protested, President Buhari was on medical vacation. But the Acting President, Yemi Osinbajo, was quoted as saying that “no gain without pain.” “If I was in the Villa during the protest,” a friend said, “I would have asked the Vice President to let Nigerians know when they would stop having pain.” “Has the Acting President forgotten that pain kills at times,” he asked me? “I don’t know,” I replied. He then asked me: “are Nigerians to fasten their seatbelts in 2017 as the pain continues?”Only the federal government can provide answers to these emotionally exciting questions.

Nigerians want to enjoy the dividends of democracy. With an official exchange rate of N315/US$, it’s unfortunate that the minimum wage of workers in Nigeria is less than US$60/month. Minimum wage has to be increased, but it mustn’t be too high to prevent massive job loss. It shouldn’t be too low to stifle growth and prosperity of workers. Whatever the pain, the pump price of petrol shouldn’t be increased, while the Naira mustn’t be devalued further. Steps must be taken to reduce unemployment and inflation through sound fiscal and monetary policies. I pray that those in government will figure out how to solve these economic challenges. If not, political activists may likely protest again before the year ends.

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