This week has been the most auspicious week for the naira yet. Buhari reinstated his resolve not to devalue the naira, Ifeanyi Ubah staked N500b with a promise to make the naira appreciate from N400/$1 to $200/$1, there was a N150 gain (from N400 to N250), and there was a N100 naira depreciation (from N250 to N350). Interestingly, the week is not over yet.

But why this erratic dance? Some may be quick to blame the CBN governor Emefiele for his monetary policies. However, we should know the economic policy of a nation consists of the monetary policy (designed and enforced by the head of the nation’s central bank) and the fiscal policy (designed and enforced by the economic team of the executive arm of the federal government).

It is clear that since the start of the fall of oil price, Emefiele has enforced valid monetary policies. Under the last administration, he was permitted to devalue the Naira, first to N166, and from N166 to the current N197-N199 range. Combined with a working fiscal policy headed by the then prestigious Minster of Finance, Ngozi Iweala, Nigerians did not feel the heat of the ailing economy when crude oil fell from a high of $105 in June 2014 to $62 in May 2015 when Buhari assumed the seat.

The problem is that from May 2015 till date, there has been no working fiscal policy. From when Buhari entered the seat of governance, he had made it explicitly clear to Emefiele that there will be no devaluation. To this end, Emefiele had enforced a number of monetary policies, including very hurtful ones like preventing Naira-denominated cards from purchasing any product or service that is not denominated in naira. A number of these policies resulted in a backlash. However to be fair, there was only so much Emefiele would have done.

To design and enforce a working fiscal policy, the presidency needs an economic team and a well-articulated budget. You cannot have one without the other. Unfortunately, at the moment we do not have any. There is no magic that can be done by an economic team if there is no budget. And there is no magic that can be done by a budget if there is no economic team.

Therefore, to be accurate, Emefiele/the CBN has done its best to hang the economy in a air and have been waiting for 9 months to rest it on the cushion of an inexistent fiscal policy. The wait is still on.

Which leads to another problem, a fraudulent budget. The 2016 budget by all means is the most important Nigerian budget since 1999, because of the challenges faced by the Nigerian economy. Ideally, the President and his Ministers should ensure that it is able to assuage current challenges.

However, on December 22, 2016, President Buhari presented a budget that he did not examine to an entire legislative arm with over 400 seated officials. Even worse, after retracting the budget weeks later, he failed again to examine the same budget thoroughly, instead submitting a doctored budget where cars are called capital expenditure and where the president will pay rent for staying at the Aso Rock villa. At this rate, we should all be concerned about the deals and documents the President has been signing on behalf of Nigerians.

The immutable fact is that the fraudulent 2016 N6 trillion budget is not the budget that is needed to craft a working fiscal policy to stabilize the economy.

Even more worrying is the fact that the fate of the budget is now in the hands of a legislative arm that Nigerians all over do not have confidence in. The price of oil is still hovering in the $30 to $35 range. And to place a nail on the coffin, there is no word from the legislative arm on when to expect completion of the budget review. Which means, we continue to wait.

And while we wait, expect the naira to dance like a village masquerade. Expect the economy to waver in no certain direction.

Until President Buhari convinces himself to settle down and deliver the dividends of good leadership to Nigerians, the state of the economy will remain inconclusive.

-Lord

At this rate, we should all be concerned about the deals and documents the President has been signing on behalf on Nigerians.
this is the end of my bible reading
thanks be to God

Buhari is the most clueless creature to ever ocupy the aso rock. In a time of economic crisis, he is busy appointing media aides instead of good economic team.

So now in June things have turned even greyer. Brilliant analysis!

ElCule:
Buhari is the most clueless creature to ever ocupy the aso rock. In a time of economic crisis, he is busy appointing media aides instead of good economic team.

They say his speech will shake 9ja we shall see soon enough...

iamkeyz:
At this rate, we should all be concerned about the deals and documents the President has been signing on behalf on Nigerians.
this is the end of my bible reading
thanks be to God

My Dear did you see the pile they had for him in Germany as soon as he signed ....